FTSE 100 in jittery start as Brexit trade talks said to be on a knife edge

The FTSE 100 was set for jittery start to trading today ahead as Brexit trade talks were said to be on a “knife-edge”.

London shares were being called up by a marginal 9.5 points by traders on the IG Index platform although that will be vulnerable to change depending on the political news. CMC Markets traders point to a mere 5 point rise to 6555.

Markets have largely priced in a last-minute deal and traders have been viewing the latest week or so of doom-laden pronouncements from the EU and UK sides as mere theatrics aimed at giving the impression that the result will have been hard-fought.

Such optimism helped drive the FTSE 100 to its highest levels since March last week.

However, Irish prime minister Micheal Martin last night said it was “50-50 right now and I don’t think one can be overly optimistic about a resolution emerging."

The two sides remain deadlocked over the level playing field, he said. Sources were saying overnight that a deal was in sight over fishing rights, but one senior UK official denied to the Financial Times that there had been any "breakthrough on fish."

France last week appears to have become more aggressive in opposing concessions being considered by EU negotiator Michel Barnier. The chief negotiator briefs EU ambassadors on the current state of play this morning while Boris Johnson meets again with European Commission president Ursula von der Leyen.

US markets start the week having raced to new highs, although there remain concerns over the state of the world’s biggest economy, according to CMC Markets. Disappointing job numbers on Friday and the prospect of 12 million American losing welfare benefits under the CARES Act at the end of the month are driving concerns of a “financial cliff-edge” for US household finances, the broker said.

On the positive side, this is making a US covid stimulus deal look more likely, possibly agreed by the end of the week.

Asian markets were soured by reports of the US is looking to sanction key Chinese officials over the Hong Kong situation, although strong China trade numbers for November kept spirits up in the region.

Drama in the world of retail shows no sign of dialling down as Mike Ashley’s Frasers Group made a bid for Debenhams. Frasers wants around 30 stores which it believes would make good-sized Flannels or Sports Direct stores.

Shareholders in Frasers will be keenly watching just how low Ashley barters the deal down. Frasers recently announced it would be publishing its interim results on Thursday

Funding Circle shares may fall after reports questioned its decision to offload some of its bad debts to a collection firm run by Elliott Management, a famously aggressive hedge fund.

Funding Circle sold the 300 personal guarantees to Azzurro Associates, a debt buyer ultimately owned by the hedge fund famed for successfully pursuing Argentina for 15 years over debt it owned. 

The customers were in the lender’s Credit Realisation Fund and Funding Circle told the Times it only agreed the deal after ensuring Azzurro abided by its own principles on chasing debts.

Shares in Elementis, the chemicals group, could rise after it said it had rebuffed a bid for £750 million from US suitor Minerals Technologies. The offer, at 130p a share, was higher than MT’s first tilt, at 107p,  but remained too low and “opportunistic”, Elementis said.