he FTSE 100 was set to rise in early trading today after six straight sessions of gains amid hopes that a concession from Boris Johnson could pave the way to a Brexit trade deal.
The Prime Minister is leading a last minute push for a deal this week and yesterday dropped his threat to break international law and renege on parts of the withdrawal agreement in what was seen as an act of good faith.
However, officials were still warning that on issues such as fishing, regulatory alignment and governance, talks remained stuck. European negotiator Michel Barnier made clear that he did not want to rush into a bad deal.
He urged the EU to prepare for a no-deal result and a contingency plan.
Separately, the UK government showed it was working hard to seek a trade deal with the US by planning to stop participating in EU tariffs against US aircraft subsidies. The EU put the punishment on US imports in retaliation last month for illegal state aid to Boeing.
The move signalled the UK will no longer take part in the EU’s tough negotiating stances which are only possible because the bloc is so valuable to those who trade with it.
However, EU officials said Britain would have had to pull out of the tariffs anyway as the dispute is with Europe, not the UK. They said the US could continue to punish the UK because it argues the UK, Germany and France subsidise Airbus.
Traders on the IG Index and CMC platforms predicted the FTSE 100 would gain 30 points to 6588.
Asia markets had a decent session, in a move CMC Markets said should push European shares up when trading opens.
CMC analyst Michael Hewson said traders were becoming inured to the many ups and downs of the Brexit talks but said: “The stars do appear to be aligning for some form of deal by the end of the month.”
He described the agreement on the Northern Ireland protocol as “a very positive sign” despite Barnier’s hawkishness.
He said the hope in markets was that Johnson and von der Leyen’s head-to-head talks could see them push back against the hawkish voices pressurising them at home for a no-deal outcome.
Numis issued a detailed research note on the popular topic of ESG funds – those investment products that back companies displaying strong environmental, social and governance behaviours.
It found the market confusing as there are no consistent labellings in the funds industry of what denotes ESG funds, but on the whole, while they performed well over one, three and five years against traditional benchmarks, they did not perform so well in the November rally.
The biggest players were Royal London, Liontrust, BMO, Blackrock and Baillie Gifford, with the largest funds having the best performance.
ESG funds have been gaining in popularity with investors, with huge inflows of investment in recent years, and that trend was set to continue, albeit with a few wobbles along the way as the market becomes increasingly crowded and confusing for investors.
Numis points out that they could prove less popular if their performance gets left behind in a “value rally”.
Food for thought for those investing in such funds or considering whether to pick ESG stocks in 2021.
G4S shares could come crashing down to earth after the group accepted a 245p takeover offer from Allied Universal Security Services last night. Shares had raced up to 255p in the hope of a higher offer from Allied. The 245p bid outpaced rival bidder Gardaworld’s 235p.
Computer games maker Codemasters will remain in the spotlight after hedge fund Odey warned investors a white knight could be waiting in the wings to top its agreed bid from Take-Two Interactive of the US. Odey, which believes the offer is too cheap, said rivals such as Liberty Media or Ubisoft could launch better bids.
Publisher Future also faces shareholder pressure over takeovers. Its £544 million bid for Goco, owner of the Go Compare price comparison website went down like the proverbial lead balloon with investors in Future. Now it is being opposed by a leading Goco shareholder, Polygon, for being too cheap. Sir Peter Wood owns a near 30% stake in Goco and has pledged his support but the deal needs 75% of shares to be voted in favour.