European stocks jump higher as investors upbeat over post-Brexit deal
The FTSE 100 closed 56.45 points higher, or 0.72%, at 7,935.11 and the pound briefly jumped to 1.205 US dollars.
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Your support makes all the difference.European markets and the pound jumped higher after Rishi Sunak hailed his “decisive breakthrough” on post-Brexit rules and confirmed trade borders in the Irish Sea have been removed.
Sterling leaped abut 0.95% higher to 1.205 US dollars shortly after the “Windsor Framework” was agreed between the Prime Minister and European Commission president Ursula von der Leyen.
And UK markets were enjoying a resurgence after the FTSE 100 suffered several days of decline last week.
Global markets had taken a knock-back on Friday after new price index figures revealed US inflation unexpectedly ticked up last month, prompting expectations that the Fed will further hike up interest rates to control rising prices.
But the post-Brexit deal provided some light relief for investors hoping for an end to the deadlock over the Northern Ireland Protocol.
The FTSE 100 closed 56.45 points higher, or 0.72%, at 7,935.11.
The German Dax jumped by 1.13% and the French Cac surged by 1.51% at close.
And across the pond, the US’s S&P 500 was up by about 0.35% and Dow Jones was 0.13% higher when European markets closed.
Nevertheless, analysts warned that there is still a long way to go before reaching any significant recovery in cross-border trade.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Brexit has cast such a long shadow over the UK economy that the lights of opportunity will need to shine more brightly before the pound undergoes a big further rebound.”
Chris Beauchamp, chief market analyst at online trading platform IG, also cautioned that optimism might be somewhat short-lived.
He said: “Friday’s price index shocker certainly gave investors a fright, but the bargain hunters have returned in trading on Monday.
“After the ‘good news is bad news’ theme of recent weeks, news of the UK-EU deal on Northern Ireland is one welcome development, and one that doesn’t involve the words ‘inflation’ or ‘interest rates’.
“But the overall outlook still seems to point towards high inflation and continued rate rises, something unlikely to prompt sustained gains for stocks.”
When European markets closed, the pound was trading 0.75% higher at around 1.203 against the US dollar and up 0.28% to 1.135 euros.
In company news, Primark owner Associated British Foods reported a jump in sales at the budget fashion chain in a fresh indication that shoppers are turning to cheaper items amid the cost crunch.
AB Foods said consumer spending had been more resilient than it anticipated, leading the group to up its earnings outlook for the full year.
Shares in AB Foods were up by 1.4% at close.
Meanwhile, a spell of company insolvencies signalled good news for restructuring specialist Begbies Traynor, which revealed its finances had been boosted by the recent collapse of Paperchase into administration.
The firm, which is the largest player in handling UK insolvencies, said it had seen an “encouraging level” of insolvency appointments across all market sectors over the three months to February.
Its share price closed 5.3% higher following the upbeat trading update.
The biggest risers on the FTSE 100 were Rolls-Royce, up 8.96p to 145p, Entain, up 50p to 1,356.5p, J Sainsbury, up 8.2p to 271.2p, Melrose Industries, up 4.55p to 151.25p, and Persimmon, up 43p to 1,438p.
The biggest fallers on the FTSE 100 were Airtel Africa, down 2p to 121.6p, M&G, down 3.4p to 207.9p, Smith & Nephew, down 11.5p to 1,203.5p, Haleon, down 2.95p to 323.75p, Fresnillo, down 5p to 763.8p.