(Sharecast News) - London stocks nudged lower in early trade on Wednesday, underperforming their European peers as sterling was lifted by reports a Brexit deal could be announced later in the day.
At 0845 GMT, the FTSE 100 was down 0.2% at 6,438.94, while the pound was up 0.4% against the dollar at 1.3412 and 0.3% higher versus the euro at 1.1017 after ITV said a Brexit deal was possible following progress in talks on fishing rights.
ITV's political editor, Robert Peston, tweeted late on Tuesday: "A UK source now says agreement on a UK/EU trade deal is again possible tomorrow.
"Presumably because, says a separate source, there was movement late tonight on access to the 6-12 mile (offshore) zone, ocean fishing and the sanctions regime after the interim period of moving towards new quotas.2
MUFG said: "Hopes have been raised once again that progress has been made and that an announcement could come as soon as tonight.
"With many issues now resolved according to reports from Brussels, the haggling over fishing appears to be what still needs to be agreed. If those reports are correct, then surely at this stage, a positive outcome is most likely. Getting a deal by tonight is being facilitated by numerous calls taking place between PM Johnson and Ursula von der Leyen. The percentage of fish the EU will have to sacrifice and the transition period to that new number will now need to be sorted at the highest level.
"As we have stated before, we assume any deal announced later will include some grace period on customs checks going live on the EU side. If that assumption is wrong, the gridlock we see now at the border with France will worsen and therefore GBP will get little bounce on the good news. Friction at the border is inevitable under a new deal but a grace period will at least help countries prepare under the certainty of the negotiated trade deal."
Meanwhile, the issue of US stimulus was in focus after President Donald Trump attacked the $900bn pandemic relief package passed by Congress on Monday, calling it a "disgrace" and demanding that changes be made before he signs the bill.
Overnight, Trump complained the bill delivered too much cash to foreign countries and not enough to Americans. The legislation provides a $600 payment to most Americans but Trump wants Congress to increase the "ridiculously low" figure to $2,000, or $4,000 for a couple.
In a video, the president said he wanted Congress to "send me a suitable bill or else the next administration will have to deliver a Covid relief package".
Investors were also mulling news that France has agreed to ease UK border restrictions. However, with only truck drivers and French and EU citizens or residents who can show a negative Covid test result allowed to enter until at least 6 January, the disruption is unlikely to end anytime soon.
In equity markets, Premier Inn owner Whitbread gained after The Times said the company had asked its landlords for a 50% rent reduction for the next three months as hotels and restaurants take a hit from the pandemic.
British Land rose after saying it had sold a 75% interest in a portfolio of three buildings in the West End to Allianz Real Estate for £401m.
CLS was on the front foot after exchanging contracts to buy "The Brix" office building at Kruppstrasse 16, in Essen, Germany for €38.2m.
Shares of Cairn Energy surged after the oil and gas exploration and development company won a long-standing tax dispute with the Indian government over backdated charges and said it will receive $1.2bn in damages, plus interest and costs.
Business software maker Sage edged lower after selling its Asia and Australia units to The Access Group for £95m.