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European stocks end on high note with Brexit deal in sight

Published 12/24/2020, 03:03 AM
Updated 12/24/2020, 08:40 AM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Susan Mathew and Supriya R

(Reuters) - European shares rose for a third straight session on Thursday with a Brexit trade deal finally in sight just a week before Britain cuts its ties with the European Union.

London mid-caps jumped 1.2% to end a holiday shortened session at their highest since February, while the FTSE 100's gains were limited by a stronger pound weighing on the exporter-heavy index. (L)

Brexit-sensitive banks led the pan-European STOXX 600 index 0.2% higher to make up losses from earlier in the week when a new fast-spreading variant of the coronavirus spooked markets. [GBP/]

After months of wrangling, and amid warnings of no deal, Britain and the European Union were on the cusp of striking a narrow trade agreement, sources in London and Brussels said, swerving away from an acrimonious split five years after the Brexit referendum.

Talks could still have "some hours to run", a UK source said on Thursday, adding that the two sides were still haggling over the EU's right to fish in British waters.

"Everyone's very curious to see what ultimately will be decided on," said Bert Colijn, senior economist, eurozone at ING, adding that the big theme was if tariffs were off the table - seen as crucial to limiting the impact on European exporters.

"If you look at it in the very long run... finding a deal at the 11th hour is going to be positive from a growth potential side for the UK economy, and therefore, ultimately... to stocks."

Banks jumped 0.7% with Britain's Lloyds (LON:LLOY) and Barclays (LON:BARC) up 4.0% and 1.8%, respectively.

Irish stocks closed down 0.3% with Flutter Entertainment falling 2.2%, making the travel and leisure sector the biggest decliner in Europe.

France's CAC 40 closed down 0.1%, while Spain's lender-heavy index climbed half a percent.

Stock markets in Germany, Italy and Switzerland were closed for the Christmas holidays.

Unprecedented amounts of stimulus, and lately vaccine optimism, have seen the STOXX 600 rise close to 50% from its March lows, though it still remains about 9% below this year's pre-pandemic high and is on course to end the year about 5% lower.

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt

Banks and oil stocks have weighed the most on worries about the economic toll of the pandemic, while technology stocks have led the recovery among major sectors as they emerged winners amid the work-from-home trend.

Latest comments

its goin to be ok
Its a hugh gamble. If you have Pound, the market close and they don't do that deal.
My god hopefully it ends soon.
A Brexit deal is priced already in but what happens if a deal is not confirmed until next week?Dirty game...
Be sure the failure will be completely ignored.
After vaccine injection, Santa rally is now good to go, lol
did anybody else have EUR/GBP? I wanna now if I'm single one who think it will grow back.
how much time to anouned
rally????? or crash
crash....🤪
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