Blog: FTSE 100 falls amid scepticism over Brexit trade talks breakthrough as Covid 19 lockdowns hit US share prices – Evening Standard

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he FTSE 100 was set to fall for a second day today despite hopes that Britain was likely to strike a compromise that would see a Brexit trade deal with the EU thrashed out over the weekend.

The Irish prime minister said both sides had softened their stance on the knotty question of access to UK fisheries.

Brussels sources said Britain was close to offering a compromise whereby EU fishermen were allowed generous access to UK waters for a limited transition period. 

One UK minister told the Financial Times the transition was not much of a climbdown for the UK because “we simply don’t have enough boats to catch all the fish.” 

Sources said the EU’s access would taper as Britain built up its fishing fleet.

When a deal is finally struck, UK shares should surge ahead, but, as CMC markets analyst Michael Hewson said of the mooted prospects of an agreement next week: “While it would be nice if that were the case, this seems unlikely, simply because it would go against everything we know about the brinkmanship that tends to characterise EU negotiations.

“The fat lady hasn’t even started to clear her throat yet, let along sing.”

Shares were set to continue their climbdown after reaching highs on Monday following news of the Moderna Covid-19 vaccines breakthrough as profit takers moved in.

The FTSE 100 was being called down 27 points at 6334 by traders on the IG Index platform.

Takeover deals in the banking sector continued apace following Monday night’s announcement of talks between BBVA and TSB’s Spanish owner Sabadell. 

That sparked speculation that TSB could soon be up for sale again.

The Co-operative Bank has received an approach from Cerberus and Sainsbury’s has had “very preliminary expressions of interest” for its bank. 

Co-op’s hedge fund owners have been looking for an exit for years, having seen profits struggle since they bought it more than five years ago.

Takeover talk around the sector could spread into the stock market quoted sector, particularly among challenger banks today.

Markets across the world were spooked by growing evidence that the coronavirus pandemic is having a serious impact on the US juggernaut economy. 

Consumer spending is still being badly affected as the virus spreads and more and more states are beginning to lock down.

Meanwhile, the multi-trillion dollar Covid stimulus package looks weeks away despite Joe Biden’s victory in the elections.

US shares fell after three days of gains, which will spill over into the European markets today.

UK and EU inflation data will come in well short of the target as economies are locked down with potential shoppers stuck in their houses and shops shut. 

The UK CPI inflation is likely to come in similar to the 0.5% of September and core prices flat at 1.3%.

Producer prices, also known as factory gate prices, are likely to fall 2.7%.

“Quite simply, there are very few signs of inflationary pressure anywhere in the official headline numbers,” said Hewson.

European prices are in an even worse state, with October CPI set to fall 0.3% and core prices remaining at a record low of 0.2%.

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