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Pound and FTSE fall as no-deal Brexit fears resurface

Pound and FTSE 100 retreat as cross-party Brexit talks end after six weeks without an agreement.

Pound and FTSE fall as no-deal Brexit fears resurface

Update: Both the pound and FTSE 100 have retreated as cross-party Brexit talks between the Conservatives and Labour are set to close after six weeks without an agreement.

Sterling fell to $1.272 against the dollar, adding to yesterday's losses sparked by Prime Minister Theresa May agreeing to set a timeline for her departure in the first week of June.

The UK blue-chip index gave up five points to close at 7,349, as the deadlocked cross-party talks reignited fears of a no-deal Brexit. May and Labour leader Jeremy Corbyn are now due to discuss options as to how to move forward and find a parliamentary consensus over Brexit.

‘As noted yesterday, it seems a "dead cert" that Theresa May's deal won't pass and she is almost certain to be gone by June,’ Markets.com chief market analyst Neil Wilson said.

‘Having seen the pound trade in a narrow range around $1.30 for some time as it all went quiet on the Brexit front, markets are pricing in greater political uncertainty again.’

EasyJet (EZJ) shares took flight, up 5.3% to £10.25, despite the airline blaming Brexit and drones at Gatwick for its £272 million loss in its first half results.

It also warned of weakened demand and lower revenues per seat in the second half, with forward bookings down 3%. However, expectations for the full-year remain unchanged and in line with market expectations.

‘Although there is likely to be further turbulence over the short to medium term the group’s relatively strong balance sheet, attractive dividend and opportunities for growth, especially in Germany, lead us to remain with a longer-term "buy" recommendation,’ said Graham Spooner, investment research analyst at The Share Centre.

Just Eat (JE) was the biggest faller on the main market, losing 8.2% to 622p, after online marketplace Amazon (AMZN.O) announced a big investment in the takeaway website’s rival Deliveroo.

‘It is worth remembering that Just Eat remains the market leader in the UK, however, this development ramps up the pressure on management as they reshape the business to increasingly offer delivery services alongside an online takeaway platform,’ AJ Bell investment director Russ Mould said.

‘Pressure on Just Eat’s share price could leave the company vulnerable to being swallowed up by a larger peer.’   

The FTSE 250 dipped 79 points, or 0.4%, to 19,452, but Metro Bank (MTRO) leapt up 26% to 677p, after raising £375 million to boost its finances following an accounting error in January, which hit the bank’s capital.  

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