Pound weakens after latest Brexit talks stall in Brussels

The FTSE 100 on Wednesday was lifted by the weak pound, which fell after UK Attorney General Geoffrey Cox admitted that little headway was made in Brexit negotiations with European Union officials.

London’s top index closed 12.57 points, or 0.17%, higher at 7,196 while Germany’s DAX fell 0.28% and France’s CAC was down 0.16%.

The pound declined after Mr Cox said talks in Brussels with Michel Barnier, the EU’s chief Brexit negotiator, were “robust” and that both sides exchanged “strong views” over Britain’s impending departure from the trading bloc.

Sterling was down 0.23% against the US dollar at 1.314 and 0.28% lower versus the euro at 1.161 at the London market close.

Fiona Cincotta, senior market analyst at City Index, said “Gloomy Brexit headlines continued to eat away at trader optimism. According to the UK Attorney General, returning from Brussels there has been little in the way of progress over changes to the Irish backstop arrangement.

“(Prime Minister) Theresa May going back to Parliament empty-handed will not only be highly embarrassing but also mean that she is unlikely to get the numbers necessary to push her Brexit deal through.”

Ms Cincotta added that while the pound remains comfortably above the 1.30 mark against the greenback, “demand has been weakening over the past few days and we expect it to continue to weaken ahead of next week’s vote”.

In corporate news, gambling giant Paddy Power Betfair unveiled plans to change its group name as it posted an 11% fall in annual profits after ramping up investment in its fledgling US sports betting business.

The firm said it would be seeking shareholder approval at its annual general meeting (AGM) in May for a change to Flutter Entertainment to reflect its “increasing diversity”, although it stressed this would not affect consumer brands.

Paddy Power shares closed down 165p to 6,065p.

Legal & General became the UK’s first £1 trillion investment manager following a spate of infrastructure deals last year.

The group said alongside its annual results that money pumped into infrastructure, clean energy, commercial real estate and residential property across British cities by its investment arm and an increase in international assets helped it reach the landmark figure.

L&G shares fell by 10p to 276.2p.

Box maker DS Smith agreed to sell its plastics division in a deal worth 585 million US dollars (£450 million) as it looks to cut debt and refocus on sustainable packaging.

The FTSE 100-listed group said it is set to make £400 million in net proceeds from the sale to private equity firm Olympus Partners.

DS Smith shares rose by 13p to 362.1p.

Brent crude, the international benchmark, was flat at 65.58 US dollars (£49.88).

The biggest risers on the FTSE 100 were British American Tobacco up 149.5p to 3,050p, DS Smith up 13p to 362.1p, Wood Group up 18.4p to 567.6p, and Evraz up 18.2p to 610p.

The biggest fallers on the FTSE 100 were Burberry down 79p to 1,874.5p, Legal & General down 10p to 276.2p, Paddy Power Betfair down 165p to 6,065p, and Intertek down 96p to 4,900p.

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