Pound bolstered by hopes of cross-party Brexit resolution

The pound got a boost on Wednesday as hopes were raised for a resolution to Brexit.

The currency surpassed the 1.30 US dollar mark, rising 0.38% to 1.308. It was also 0.13% on the euro at 1.163.

Fiona Cincotta, senior market analyst at City Index, said: “Brexit optimism lifted the pound; cross-party talks are reportedly going well and Theresa May hinted that a customs union compromise could be on the cards.

“The fact that Theresa May is intending to conclude the talks mid next week suggests that the two sides are close to sealing a deal. Suddenly a Brexit agreement being pushed through Parliament before the toxic European elections doesn’t look so farfetched.”

Sterling’s strength held back London’s top stocks, which lost ground as multinationals were impacted by the less beneficial exchange rate.

The FTSE 100 closed lower by 18.51 points, or 0.25% at 7,385.26.

Volatility was relatively low across Europe due to Mayday market closures. The German Dax inched up 0.13% and the French Cac rose 0.1%.

Oil prices slipped as US crude supplies posted their biggest weekly climb of the year. A barrel of Brent crude oil was trading 0.28% lower at 71.42 US dollars.

In company news, Sainsbury’s revealed a 42% plunge in annual profits after taking a raft of charges including a £46 million hit from its failed bid to merge with Asda.

The chain reported statutory pre-tax profits of £239 million for the year to March 9, down from £409 million the previous year, weighed down by £396 million of charges.

Shares in the supermarket rose 8.7p to 231.2p.

House-building giant Persimmon revealed a drop in forward sales and became the latest group to warn over rising build costs.

The Charles Church owner said total forward sales revenues had declined to £2.7 billion, from £2.8 billion over the same period last year.

Its stock fell 14p to 2,222p.

The London Stock Exchange Group shrugged off “challenging” markets to report a hike in first-quarter income as its clearing house, LCH, enjoyed surging growth.

LSE said income lifted 5% to £546 million in the three months to the end of March.

Shares rose 172p to 5,186p.

Mecca Bingo owner Rank Group reported a 1% increase in revenues in the first three months of the year, as its chairman Ian Burke announced his departure.

The company’s share price declined by 1p to close at 159p.

Meanwhile, shares in pharmaceuticals giant GlaxoSmithKline fell by 13.6p to 1,559.8p after it reported a rise in first-quarter profit off the back of rising vaccine sales. The pharmaceutical giant posted a 17% leap in pre-tax profit to £1.3 billion for the three months to March 31, while revenue came in 6.1% higher at £7.66 billion.

Takeover target Inmarsat slipped to a first-quarter loss as it counted the cost of charges. For the three months ending March, the satellite telecommunications firm sank to a 266.9 million US dollar (£204 million) pre-tax loss, compared to a profit of 56 million US dollars (£43 million).

Shares dipped 4p to 541.2p.

The biggest risers on the FTSE 100 were Paddy Power Betfair up 278p to 6,766p, Sainsbury’s up 8.7p to 231.2p, London Stock Exchange Group up 172p to 5,186p, and Whitbread up 115p to 4,575p.

The biggest fallers on the FTSE 100 were Micro Focus down 98.2p to 1,839.6p, Just Eat down 19p to 680p, Antofagasta down 19.8p to 888.2p and Pearson down 17.8p to 812.4p.