FTSE rallies for seventh day in a row as pound slips

(Reuters) - London’s exporter-heavy FTSE 100 hit a more than four-month high on Thursday partly in response to a weaker pound, which came under pressure from fears Britain may leave the European Union without a trade deal at the end of 2020.

FILE PHOTO: A trader looks at financial information on computer screens on the IG Index the trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

The FTSE 100 .FTSE was up by 0.4%, rising for the seventh straight session. Its gains have been supported by a breakthrough on a U.S.-China trade deal and a landslide victory for Prime Minister Boris Johnson in the British national election.

The euphoria around Boris Johnson’s win carried into this week but was soon overshadowed by fears of a chaotic Brexit after the government set a hard deadline of December 2020 to reach a new trade deal with the European Union.

That pushed sterling to two-week lows, helping blue-chip companies with a big international presence, such as Unilever ULVR.L and AstraZeneca AZN.L, rise. The midcap index .FTSE ended relatively flat after hitting all-time highs earlier this week.

A Bank of England meeting failed to deliver any surprises, leaving traders to look ahead to a parliamentary vote on Johnson’s Brexit deal on Friday.

“Now that the dust has settled from the UK general election, and the U.S.-China trade deal, dealers don’t know which way to look,” CMC Markets analyst David Madden said.

“Between now and Christmas there isn’t much on the horizon in terms of macroeconomic news, so it is possible that equity benchmarks will continue to trade sideways.”

It was a quiet day on the corporate news front but Just Eat JE.L shares saw some action, ending 1.2% higher after Prosus NV PRX.AS and TKWY.AS served up their final offers for the British online food delivery group.

The Amsterdam-listed companies increased their bids, with Prosus offering 800 pence a share and raising its all-share offer which values Just Eat at 916 pence per share based on its closing price on Wednesday.

Just Eat fell sharply after Prosus’ announcement, before recovering to trade higher and touch a near one-and-half year high following’s revised offer.

Changes to stock ratings drove some moves, with blue-chip tour operator TUI TUIT.L dipping 3% after Berenberg cut its rating on the stock. Mid-cap outsourcing group Capita CPI.L dropped 5% on a Deutsche Bank rating downgrade.

NMC Health NMC.L dropped another 11%, adding to a more than 30% decline since Tuesday when Muddy Waters disclosed a short position in the healthcare company.

Reporting by Shashwat Awasthi and Yadarisa Shabong in Bengaluru; Editing by Saumyadeb Chakrabarty and Jane Merriman