FTSE 100 CLOSE: Index rises as pound shoots above $1.25 ahead of Brexit talks

UK shares made modest gains despite the pound shooting higher.

In the UK, the FTSE-100 Index finished up 53.72 points at 6220.14.

The rise came as sterling above $1.25 against the dollar, its highest in a month, as signs emerged that Britain might be willing to compromise on sticking points in Brexit negotiations with the European Union.

Britain is expected to indicate flexibility over fisheries and trade rules if the European Union agrees to lessen its demands regarding regulatory alignment and fishing access as a new round of talks kicks off.

Britain has until July 1 to ask for an extension to the current transition period, which ends in December.

Meanwhile reports that senior Conservative MPs were rallying against UK quarantines boosted travel stocks again today. The idea of reciprocal agreements between the UK and other countries deemed relatively safe would see quarantines lifted. Easyjet and Carnival leapt, while Intercontinental Hotels Group and British Airways owner IAG headed upwards.

Away from the FTSE-100, Tui's UK-listed shares gained as it benefited from hopes for better sales to German tourists.

Electronics distributer Electrocomponents had a strong session, up on the back of decent revenues. The group said it was trading so well that it will consider making a half-year dividend payment, although it will defer its final divi payment. It said it had so far done no staff furloughing or used the Bank of England's covid commercial paper bond scheme for big companies. Bravo.

Across the water and President Trump's threat last night that he would be sending in the National Guard to quell civil unrest in states that fail to stop it themselves received a mixed response from analysts at a time when most investors were grappling with the implications of countries relaxing covid travel restrictions.

CMC Markets analyst Michael Hewson said: "The main focus once again appeared on the longer-term prospects of the easing of lockdowns across the world, though if the violence on US streets continues for much longer, US investors might have to cope with a lockdown of a different kind, imposed by the National Guard."

US shares have so far largely shrugged off the unrest, with investors more concerned about more global factors such as Washington's approach to China in the face of Beijing's belligerence towards Hong Kong.