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London close: Stocks finish higher as US president rows back on US-UK trade deal remarks

By Alexander Bueso

Date: Friday 13 Jul 2018

London close: Stocks finish higher as US president rows back on US-UK trade deal remarks

(Sharecast News) - London stocks finished higher on Friday, but was off their best levels of the session, as the pound recovered from an early bout of selling, after US President Donald Trump backtracked on remarks he made overnight that the Prime Minister's soft Brexit plan would "probably kill" any trade deal with the US.
The FTSE 100 was up 0.14% to 7,661.87, while the pound edged higher 0.06% against the dollar to 1.32151 but up by 0.08% versus the euro to 1.1324.

A weaker pound tends to benefit the top-flight index as around 70% of its constituents derive their earnings from overseas.

In an interview with The Sun, Trump said that if the UK goes ahead with the soft Brexit strategy revealed on Thursday - which would stick to a common rulebook with Brussels on goods and agricultural produce - any future trade deal with the US would likely be off the cards.

"If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal," he said.

However, in his afternoon press conference, Trump appeared to row back on those remarks, saying: "We agreed today that as the U.K. leaves the EU we will pursue an ambitious U.S.-U.K. trade deal."

His comments on Brexit aside, Trump wasn't exactly getting a warm welcome in the UK as protesters launched a 20-foot tall 'Trump Baby' blimp above Parliament Square ahead of his meeting with the Queen.

Oanda analyst Craig Erlam said: "Trump was not afraid to express his views on the UK and Brexit ahead of the visit, warning that a trade deal with the US would not be possible under the model that May is seeking with the European Union, while also expressing his belief that Boris Johnson would make a good PM. This appears to have weighed on the pound in trade on Friday given the complications it could cause May and her team.

"None of this will go down well with May - who has previously pushed strongly for this visit despite much protest - and comes at a terrible time for her but as Trump well knows, she is in a very weak position right now and is unlikely to fight back and, more importantly, he wants a Brexit that best suits the US. Whether Trump's comments give more voice to dissenters among Brexiteers is yet to be seen but it certainly doesn't help the PM as a trade deal with the US has long been touted as one of the benefits of leaving the EU."

In corporate news, Micro Focus was the top gainer following a tech sector rally on Wall Street, while DCC was sitting pretty after saying that first-quarter group operating profit was "well ahead" year-on-year and announcing two acquisitions.

Flexible office space provider Workspace was also on the front foot after it said it saw good customer demand in the first quarter, with enquiries up but lettings a touch lower, and that it is actively exploring acquisition opportunities.

Antofagasta dipped as it confirmed that its subsidiary Mineral Centinela was selling Centinela Transmisión, the company that holds its electricity transmission lines, for $117m.

Recruiter Hays surged as it said it expects full-year operating profit to be "marginally" ahead of current consensus market expectations following a record final quarter, while Ashmore rose even as it posted a drop in assets under management in the fourth quarter.

Halfords slipped after announcing the appointment of Waitrose finance director Loraine Woodhouse as its new finance chief.

Diageo was boosted by an upgraded to 'buy' at Goldman Sachs while Evraz and IMI were up after upgrades by Renaissance Capital and HSBC, respectively.

Credit checker Experian was steady after reporting an acceleration in sales growth in the first quarter of its new trading year but saying currency swings looked likely to have a bigger impact on full year profits than first expected.

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