The FTSE started the day on a marginally higher note but hasn’t been able to remain on an upward course with geopolitical tensions in the Middle East and high oil prices eroding a sense of stability in the market.
The brief respite in threats exchanged between Iran and the US has taken some froth off the oil market and Brent crude prices and WTI slipped down 0.42% and 0.38%, respectively. This has meant that FTSE oil firms have traded lower, losing some of the gains made yesterday. Gold is also back to $1,586 although it has dropped to the level seen before Iran tensions started.
Three days of Brexit bill
UK stocks mainly focusing on the domestic market gained ground on news that Britain is no longer making preparations for a no-deal Brexit. For the next three days Parliament will scrutinise Boris Johnson’s Brexit proposal and given that MPs have already given a provisional green light to the bill before the holidays, it is now expected to pass without serious opposition.
The pound is neutral against the dollar in light of the discussions. Without the likelihood of a no-deal Brexit there is no immediate selling pressure, yet domestic economic reading provides little reason for the currency to move higher. Sterling is in a weaker position against the euro on concerns that the trade deals Britain will eventually end up with will not be as favourable as investors had expected.