LONDON MARKETS: Brexit Hopes Fuel Fresh Rally For The British Pound To Highest Level Of Johnson Administration

By Steve Goldstein, MarketWatch

U.K. bank stocks rise

Growing hopes that U.K. and European leaders can reach an agreed deal for Britain to leave the European Union pushed the British pound higher for a second day on Friday.

The pound rose to $1.2645, up from $1.2444 on Thursday, a day when the U.K. currency had its best single day percentage advance since March.

It's the strongest sterling has been since Theresa May was prime minister, in late June. Boris Johnson stepped into the No. 10 Downing Street on July 24.

European Council President Donald Tusk -- who has tweeted criticism at British Prime Minister Boris Johnson -- on Friday said he received promising signals from Ireland's Leo Varadkar that a deal is possible.

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The Times newspaper reported that Johnson on Thursday gave some ground on the issue of Northern Ireland.

The European Commission meanwhile said Michel Barnier had a "constructive" meeting with Brexit Secretary Steve Barclay on Friday.

"The change in tone yesterday from the Irish government and the silence on the U.K. side indeed suggests the U.K. has made some notable concessions," said analysts at Citi, who said they remained skeptical a deal can be reached by Oct. 31, and that the more likely path is an extension of the Article 50 deadline and a general election.

The pound's strength weighed on U.K. stocks, as the FTSE 100 increased 0.32% to 7209.66, which isn't as strong as the rise made by European rivals. Read Europe Markets (http://www.marketwatch.com/story/hopes-for-trade-pact-buoy-european-stocks-as-publicis-and-hugo-boss-hit-by-warnings-2019-10-11)

The Brexit hopes did lift U.K. banks Royal Bank of Scotland (RBS.LN) , which surged 12%, and Lloyds Banking Group (LLOY.LN) , which rose 10%. The big multinational pharmaceuticals lost ground, with GlaxoSmithKline (GSK.LN) falling 4% and AstraZeneca (AZN.LN) losing 3.2%.

(END) Dow Jones Newswires

October 11, 2019 07:41 ET (11:41 GMT)

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