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FTSE 100 hits highest since March on Brexit trade deal cheer

Written by Business World, on 29th Dec 2020. Posted in World

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Britain's FTSE 100 hit its highest since early March on Tuesday as investors returned from a long weekend to cheer a post-Brexit trade deal that averted a chaotic exit from the European Union.

In its first day of trading after the deal, the blue-chip FTSE 100 index gained 2.6% and was set for its best day since Nov. 9.

Drugmaker AstraZeneca rose 4.7% to give the biggest boost to the FTSE 100, while shares in other international firms such as Unilever and Diageo gained despite a firmer pound.

"The deal should see sentiment towards the FTSE indices recover just as the dividend payout ratio improves, vaccines are rolled out and overseas revenues accelerate. We lift UK equities to Bullish," analysts at brokerage Jefferies wrote in a note.

The coming days will provide a first taste of the effects of Brexit and regulators on both sides of the English Channel will be on alert for market dislocations on Jan. 4, the first trading day of the new year.

"The honest answer is we do not know what January 1st will hold. In all likelihood, there will be delays and bedding-in period as the new reality and processes are explored and enacted," said Jeffrey Halley, senior market analyst at OANDA.

The deal would ensure the goods trade that makes up half of the annual EU-UK commerce remains free of tariffs beyond Dec. 31.

The domestically focussed FTSE 250 index climbed 1.9% to its highest level since Feb. 25.

In company news, e-commerce firm Hut Group rose 5.4% after saying it would buy U.S. online retailer Dermstore from Target Corp for $350 million in cash.

British insurer Admiral gained 3.0% after reports of Zoopla Property Group buying its Penguin Portals and Preminen businesses. (Reuters)

Source: www.businessworld.ie

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