The U.K.’s main stock index lost ground Thursday, as a stronger pound continued to weigh on the gauge.
Sterling keeps finding buyers after the European Union’s top Brexit negotiator offered an olive branch to his British counterparts a day ago.
How markets are performing
The FTSE 100 UKX, -0.78% fell 0.7% to 7,509.74, after retreating 0.7% in the prior session.
The British blue-chip gauge is showing a drop of 0.9% for the week, and it’s down 2.3% for the year to date.
The pound GBPUSD, -0.2456% was buying $1.3025, little changed from $1.3028 late Wednesday in New York. It’s up against the dollar by more than 1% for the week.
A stronger pound can hold back the FTSE 100 because the index’s multinational companies generate most of their sales in other currencies.
What’s moving markets
EU negotiator Michel Barnier said Wednesday the trade bloc was willing to offer the U.K. an unprecedented partnership, delivering a big boost to the pound for that session.
His comments have helped ease concerns about the potential for a “no-deal Brexit,” meaning a disorderly departure from the EU by the U.K., without an agreement on future trade relations.
Read more: Gear up for a no-deal Brexit: 5 areas investors should watch
And see: A top London startup’s CEO flags the biggest Brexit threat to his industry
What are strategists saying?
Barnier’s “softer language will be a positive but A) There is yet scepticism about what it all means with few details on any of this; and B) We have heard this kind of language in the past,” said Neil Wilson, chief market analyst for Markets.com, in a note.
Stocks in focus
Shares in Vodafone Group PLC VOD, -1.68% fell 1.9% after the telecom announced a merger deal for an Australian business.
Off the FTSE 100, Hays PLC’s stock HAS, -4.78% dropped 4.3%, even as the recruitment company announced a special dividend following a rise in full-year profit.
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