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Juncker Brexit deal comments help markets rise – but not for long

By PA City Staff

Traders finished the week much like it began, with head scratching and confusion as rumour and counter-rumour left markets swinging wildly throughout the day.

The focus on Friday was firmly on the pound, as it shot up to two-month and four-month highs against the dollar and euro respectively.

Investors appeared buoyed by comments from European Commission president Jean-Claude Juncker that a deal between the EU and UK over Brexit can be reached.

But by the afternoon, that optimism started to evaporate as further reports suggested the UK is keeping its latest proposals under wraps and Mr Juncker’s enthusiasm was tempered by others.

At the end of trading on the stock market, the pound was down 0.29% against the dollar at 1.2487.

Against the euro, it was up 0.12% at 1.1359.

The other major issue keeping investors on their toes was the ongoing US-China trade war.

David Madden, market analyst at CMC Markets UK, said: “The US-China trade story continues to be at the forefront of traders’ minds as discussion took place (on Thursday). Neither side wants to be seen as very eager to reach a deal, but the fact that talks took place is a positive step.

“President (Donald) Trump continues to claim that China are keen to make a deal, even though Beijing said overnight they are not as desperate to reach a deal as the US think.”

The FTSE 100 closed down 11.5 points at 7,344.92, although it was up throughout most of the day – hitting six-week highs at points.

Oil prices also simmered down, as traders seemed to accept Saudi Arabia claims that it was on track with getting its oil field and refinery back online after they were attacked last weekend.

A barrel of Brent crude was up 0.45 cents at 64.85 dollars – way down from the 70 dollars on Monday morning.

In company news, tour operator Thomas Cook confirmed it is seeking £200 million in extra funding as it attempts to prevent a collapse.

Shares in the business have already been decimated in recent months, due to long-term funding problems, but they managed to fall a further 23% to 3.451p.

One of Thomas Cook’s lenders, Royal Bank of Scotland, also had news of its own, as the bank appointed Alison Rose as its new chief executive officer.

Ms Rose was the heavy favourite to succeed Ross McEwan as boss of the publicly owned bank when he departs from the company on October 31. Shareholders seemed happy, with shares closing up 5.5p at 213.5p.

Shares in Trainline slid 28.5p to 438.5p after its former private equity owner KKR and other investors sold £285 million worth of shares in the business at 435p each.

Mattress seller Eve Sleep returned to the junior AIM stock exchange on Friday, after saying a planned merger with rival Simba will not go ahead and revenues will be below expectations. The shares crashed 32% to 3.31p.

The biggest risers on the FTSE 100 were Persimmon up 90p at 2,120p; Kingfisher up 7.1p at 202p; Burberry up 71p at 2,203p; Taylor Wimpey up 4.85p at 165.55p and Next up 168p at 5,988p.

The biggest fallers were DS Smith down 13.6p at 345.1p; Mondi down 41.5p at 1,582p; Unilever down 125p at 4,795p; BAE Systems down 13.6p at 571.6p and Relx down 42.5p at 1,857.5p.