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Market report: Sterling goes on a rollercoaster ride

Lizzy Burden
·2-min read
Sterling sank after an EU official said were “no landing zones” yet in Brexit trade talks
Sterling sank after an EU official said were “no landing zones” yet in Brexit trade talks

Fears the year could end without a Brexit trade deal set sterling on a rollercoaster ride yesterday.

First the pound was down about 0.6pc against the dollar after the EU indicated it would start legal proceedings against the UK over Boris Johnson’s plan to breach terms of its Brexit divorce deal and break international law.

Then sterling clawed back its losses, rising to be up 0.4pc against the dollar at $1.2978, after a Financial Times reporter tweeted that officials in London saw the chance of a deal having risen from 30pc to 70pc.

However, it sank again after an EU official was reported as saying there were “no landing zones” yet in trade talks with Brussels. 

“It does seem like there are tentative signs of ‘progress’ despite all the chuntering around the Internal Market Bill, which looks increasingly like a sideshow to the main event of trade talks,” Neil Wilson of Markets.com said.

Meanwhile, oil prices tanked more than 5pc as the rise in Covid-19 cases worldwide dampened the outlook for demand, and after a rise in Opec output last month, particularly from Libya and Iran.

Standard Chartered analysts said they now expect global demand to fall 9m barrels per day this year and recover by only 5.6m barrels per day next year, leaving the 2021 average slightly below the 2016 average.

Elsewhere, the FTSE 100 medical technology giant Smith and Nephew said its underlying revenue fell about 4pc in the third quarter of the year, rebounding from a massive decline in the three months before. 

Improvement was strongest in its orthopaedics business as more people started having elective surgery again, the company said. The shares climbed 20p to £15.37.

Stobart Group, the owner of Southend Airport, flew up 0.8p to 20.5p after it insisted it was “well positioned” to benefit from an economic recovery, only weeks after easyJet decided to stop flying from the site.

Of the tiddlers, litigation funder Burford Capital reported pre-tax profits of nearly $198m for the six months to June, a 15pc slump from a year earlier.

The Aim-listed company said the Covid-19 lockdown had hurt its ability to fund new cases as the amount of money it committed to fund claims fell 74pc to $195m. 

The Guernsey-registered firm said the litigation market has now stabilised and it expects a “significant volume” of disputes arising from the pandemic to reach the courts in the coming years. 

Burford makes money by funding clients’ legal costs in return for a slice of their court winnings if the cases succeed.

It confirmed this week that it expects its shares to be dual listed on the New York Stock Exchange from Oct 19, giving it access to a deeper pool of investors. Shares rose 46.8p to 671.8p yesterday.