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Banks and builders surge on Brexit breakthrough

Shares in banks and house builders have raced to the top of the FTSE 100 after a breakthrough in the first phase of Brexit talks.

 
Banks and builders surge on Brexit breakthrough
 

Update: Shares in banks and house builders have jumped to the top of the FTSE 100 after the UK reached agreement in the first phase of Brexit talks with the European Commission.

Under the agreement, there will be no hard border between Northern Ireland and the Republic of Ireland and the Good Friday agreement will be upheld.

European Commission president Jean Claude- Juncker said 'sufficient progress' had been made to move onto the next phase of Brexit talks, involving negotiations on a trade agreement.

Stocks focused on the UK domestic economy like house builders jumped to the top of the FTSE 100 on the news.

Berkeley (BKGH), also buoyed by a 36% jump in half-year profits, was up 8.1% at £41.62.

Barratt Developments (BDEV) rose 4.3% to 634p, Persimmon (PSN) jumped 2.5% to £26.72 and Taylor Wimpey (TW) added 2.9% to 202.9p.

Banks meanwhile enjoyed the twin boost of the Brexit breakthrough coupled with new global regulations that were kinder than expected.

Banks won't have to raise as much capital as feared for the new Basel III regime for banks, meaning dividends look safer.

Lloyds (LLOY) jumped 3.6% to 66.8p, Barclays (BARC) was up 2.5% at 196.4p and Royal Bank of Scotland (RBS) added 2.2% to 281.2p.

The FTSE 100 was up 59 points, or 0.8%, at 7,379, boosted by a fall in the pound, down 0.7% against the dollar, as investors banked Brexit gains.

The FTSE 250, which is more focused on the UK domestic economy, rose 0.4%. House builders led the index, with Bellway (BWY) up 4.4% at £36.24 and Crest Nicholson (CRST) rose 3.9% to 526p.

Karen Ward, chief market strategist at JPMorgan Asset Management and a former adviser to chancellor Philip Hammond, said the Brexit breakthrough was 'a very significant step', and that while the next priority would be a transition deal, further talks may not be as much of a driving force for markets.

'Investors should remember the European Union has been in some sort of apparent crisis for six years - we've learnt EU political strategy involved blustering and brinkmanship,' she said.

'As negotiations continue in the background, Brexit fatigue may set in among investors, with more emphasis placed on the day-to-day data.'

11 comments so far. Why not have your say?

Luichicornish

Dec 08, 2017 at 11:07

Mrs May is liked a dog that don't bark but bite!

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Andrew Hill

Dec 08, 2017 at 11:21

Considering that she has been battling on all fronts I think that she has done a good job. Perhaps a couple of gin and tonics may be in order this weekend.

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Luichicornish

Dec 08, 2017 at 14:22

She got what no many politicians are lacking, integrity, honesty and trust.

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Alan Tonks

Dec 08, 2017 at 18:20

Andrew Hill

A good job you have to be joking, all that woman has done is to acquiesce at every turn.

Luichicornish

Where have you been, May hasn’t any integrity or honesty and as for trust Brexit says it all.

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DIY

Dec 08, 2017 at 18:35

May is showing stamina. But the taxpayer has to fund all the give-aways. In exchange for what, I ask?

Politicians and Integrity are direct opposites.

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Anonymous 1 needed this 'off the record'

Dec 08, 2017 at 19:28

This is a fudge. How long before we find out what is written in invisible ink between the lines?

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Alan Tonks

Dec 08, 2017 at 21:46

Anonymous

They are conniving and devious, so never. Do not forget these politicians have our best interests at heart. I will change the last part; these politicians have their best interests at heart and s*d the people and the country.

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DIY

Dec 09, 2017 at 09:32

Yes Alan, spot on, if I may say so!

And now Gove pipes up and says a deal can be changed at the Ballot box, thereby rendering the process even more uncertain and messy. Gets worse as each day unfolds. I despair.

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an elder one

Dec 09, 2017 at 20:33

Let's hope the so-called constructive ambiguity put in the deal thus far gives us room to manoeuvre eventually; as they said, this only gets us to the real business, wherein we discover reality, all can come apart and we are out without a deal.

We should have left at first chance putting money and systems in place to deal with the customs apparatus. The Northern Irish matter was none of EU's business, and with us and NI out, the Irish could have wangled something between themselves - as the French would in similar circumstance.

Negotiating a trade deal can take years and NOT get very far with the EU - look at the Canadian deal which took over three years, and yet achieved not much.

Daresay we shall have a general election before long.

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DIY

Dec 10, 2017 at 09:25

Elder One,

Yes, more messy for longer.

"Constructive ambiguity" means "We don't have a clue where we are going with this".

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an elder one

Dec 10, 2017 at 21:37

DIY, actually it's a fudge to save face - for the EU especially - and get things moving. I think we all know where we are going - though that could be up sh*t creek - trouble is there's a lot of faces to be saved, one way or another. The EU wants us out; but on their terms. The coming negotiations could entertaining; enjoy the panto.

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