The value of sterling rose modestly on the announcement the UK and European Union have reached an agreement about the terms of Brexit.
In the immediate aftermath of the announcement that an exit agreement was reached, sterling rose in value by about 1 per cent, while the FTSE 100 ended the day in modestly negative territory.
Fiona Cincotta, senior market analyst at City Index, said a combination of stronger sterling, which is bad for the FTSE 100 shares that derive the greater part of earnings from overseas will find the value of those earnings worth less as sterling rises in value, and a sharp fall in the oil price yesterday hitting BP and Shell, was behind the FTSE 100’s relative underperformance.
Helal Miah, an analyst at the Share Centre, said: "Confirmation that (prime minister) Theresa May has secured a deal resulting in the pound to surge higher by nearly 1.5 per cent on the day.
"However the pound will gyrate according to how individual ministers and MPs react to the details revealed to them when they speak to the media or tweet out their response, if allowed to do so.
"Nothing is final yet until the cabinet and the UK Parliament accept the terms by voting on the final agreement."
david.thorpe@ft.com
