Leading UK stocks closed the short Christmas Eve trading day higher on Thursday, as news broke of an historic post-Brexit trade deal between Britain and the European Union (EU).
UK prime minister Boris Johnson tweeted on Thursday afternoon: “The deal is done.”
Continued issues over fishing quotas were said to be delaying press conferences to confirm the agreement, which had been expected earlier in the day. But both sides announced a trade deal had been struck in the afternoon.
Sterling was also up 0.3% against the dollar (GBPUSD=X) at $1.3551 and 0.4% against the euro to above €1.1119 (GBPEUR=X) in afternoon trading in London. Sterling’s gains limited upward movement on the FTSE, as many top UK-listed firms make much of their profits overseas in dollars.
WATCH: UK prime minister Boris Johnson announces post-Brexit trade deal with EU
The easing of COVID-19 restrictions between the UK and France also helped calm UK stocks after all air and road travel between the countries halted earlier in the week.
It followed news on Monday that Britain had a more contagious variant of COVID. Late on Wednesday, the UK government announced another variant had been discovered in the nation, leading to even more stringent Tier 4 restrictions on Boxing Day as COVID-19 infections continue to rise rapidly.
Investors largely looked beyond US President Trump’s threats to veto the nearly $900bn (£652.64) stimulus bill, which was agreed upon after months of negotiations between Republicans and Democrats. Trump’s main issue is the stimulus checks, as he demanded that they increase from the proposed $600 allotment to $2000.
“Asian markets completely ignored the latter news yesterday, much to my surprise, and European and North American markets did much the same,” said Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA. “The developments have sent Congressional representatives scrambling to vote for bigger cheques in some quarters, while marshalling forces to override the Presidential veto’s in others.”
Asian markets were mixed at market close. Japan’s Nikkei (^N225) gained 0.5% at market close, the Hong Kong Hang Seng (^HSI) was up 0.2%, and the Shanghai Composite (000001.SS) was down 0.6%. South Korea’s KOSPI (^KS11) headed up 1.7%.
WATCH: Why is fishing so important in Brexit talks?