LONDON MARKETS: Pound Volatile As Brexit Deal Hangs In The Balance

By Barbara Kollmeyer, MarketWatch

FTSE 100 drops; ASOS soars on results

The pound was on a rollercoaster ride Wednesday, while U.K. stocks fell as investors rode a wave of headlines updating on the Brexit-deal front.

The U.K. FTSE 100 was down 0.3% to 7,184.21, while the British pound struggled as the possibly of the U.K. reaching an exit-deal with the bloc ahead of the start of a two-day EU summit that begins Thursday hung in the balance.

EU and U.K. negotiators failed to reach a breakthrough (http://www.marketwatch.com/story/pressure-is-on-for-brexit-negotiators-as-all-night-talks-fail-to-yield-a-breakthrough-2019-10-16) in all-night Brussels talks which will continue on Wednesday. Irish Taoiseach Leo Varadkar said "many issues" must be resolved before an exit deal for the U.K. can be reached, according to media reports (https://www.bbc.com/news/uk-politics-50063022), while an EU official said any deal would be unlikely without more U.K. concessions, said a Bloomberg report (http://www.marketwatch.com/story/pound-slides-after-report-eu-refers-to-brexit-deal-impossible-without-uk-concession-2019-10-16).

(http://www.marketwatch.com/story/pound-slides-after-report-eu-refers-to-brexit-deal-impossible-without-uk-concession-2019-10-16)The pound shot to a June high (http://www.marketwatch.com/story/british-pound-volatile-after-report-says-major-brexit-deal-obstacle-removed-2019-10-16) briefly later in the afternoon, after Irish broadcaster RTE reported the Ireland's Democratic Unionist Party was accepting the so-called consent element of the revised Brexit agreement, seen as the last big obstacle to a deal. But the pound backed down after DUP's leader Arlene Foster reportedly denied the report and said talks will continue.

(http://www.marketwatch.com/story/pound-slides-after-report-eu-refers-to-brexit-deal-impossible-without-uk-concession-2019-10-16)The pound , which has swung back and forth in recent sessions on Brexit headlines, was last trading flat at $1.2793 against the dollar.

Elsewhere, shares of ASOS PLC (ASC.LN) soared 20% after the U.K. online retailer reported a 68% drop in profit for fiscal 2019, but said the new fiscal year has gotten off to a solid start.

"The initial share price reaction to the results reflect a leap of faith, after management assurances that the latter part of the year was rather more positive, to the extent that it can look forward to the next period with confidence," said Richard Hunter, head of markets at Interactive Investor, in a note to clients.

(END) Dow Jones Newswires

October 16, 2019 08:57 ET (12:57 GMT)

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