MARKET REPORT: Traders make hay on hopes of a Brexit breakthrough

British shares leapt higher yesterday as reports spread that the UK and EU negotiators had signed a Brexit deal.

As traders buzzed with excitement, stocks tied closely to the economy received an extra lift.

Banks, housebuilders and airlines soared. Lloyds Bank climbed 7 per cent, or 2.43p, to 37.13p, while rival Barclays was up 4 per cent, or 5.84p, to 151.82p, and Natwest rose 5 per cent, or 8p, to 166.9p.

As traders buzzed with excitement over the prospect of a Brexit agreement in time for Christmas, stocks tied closely to the economy received an extra lift

At the same time, builder Persimmon rose 4.2 per cent, or 115p, to 2829p, while fellow giant Barratt surged 4.2p, or 27p, to 676p and Taylor Wimpey ticked up 3.8 per cent, or 6.1p, to 166.85p.

IAG, the owner of British Airways, also leapt 6.3 per cent, or 9.55p, higher to 161.8p, helping the FTSE 100 finish 0.7 per cent, or 42.59 points, up at 6495.75, while the FTSE 250 rose 1.7 per cent or 347.04 points, to 20,297.76.

The news also sent the pound up more than 1 per cent against the dollar to $1.3508. It came as investors were also cheering Cairn Energy after the oil and gas firm won a near-£1billion victory against the Indian government.

In a ruling on a long-running case, a tribunal awarded the British firm £900million in damages, plus interest and costs.

Stock Watch – NMCN 

Shares in construction and engineering firm NMCN plunged yesterday as it warned of a £16million loss, up from the £15million annual loss previously predicted, following an accounting blunder.

It includes £5.3million of losses relating to prior years that had been incorrectly reported.

It is now expecting to post an overall loss of £11.2million for 2020 – taking its extra losses to £16.5million overall.

Shares tumbled 13.3 per cent, or 38p, to 247p.

The decision sent Cairn surging 22.1 per cent, or 36.7p, higher to 202.6p.

It follows years of legal wrangling after tax officials demanded that Cairn pay more than £1billion in back taxes in 2014.

The claim related to money supposedly owed on capital gains. But Cairn fought back, seeking international arbitration and sued the government, with a tribunal then held in the Netherlands.

Cairn told investors: ‘The tribunal ruled unanimously that India had breached its obligations to Cairn and has awarded to Cairn damages plus interest and costs, which now becomes payable.’

It is a fresh setback for India after it lost another arbitration case against Vodafone, concerning £1.5billion in back taxes, in September. An Indian government spokesman said it was considering options, which could include an appeal. But that would risk creating more nervousness for foreign firms, lawyers think.

Elsewhere, IT software giant Sage Group edged down 0.8 per cent, or 4.8p, to 586.8p after it said it was selling its Asia and Australian business for £95million – and has taken a £17million minority stake in cloud software provider Brightpearl.

The firms said they would work together to take advantage of the boom in internet shopping.

Online retailer N Brown rose by 4.3 per cent, or 2.5p, to 60.7p on its first day of trading since moving from London’s main market to junior counterpart AIM.

The firm, which owns Simply Be, Jacamo and JD Williams, also announced it had successfully raised £100million from selling shares, to invest in the business and pay down debts.

After a tough start to the day for the payments firm Network International, shares bounced back to finish 5.2 per cent, or 14p, up at 284p.

Investors have shorted roughly 6 per cent of its stock following its float last year, after scandals that have hit payments industry peers such as Wirecard and Finablr, which both collapsed amid accounting fraud claims.

Those companies both had a significant presence in the United Arab Emirates, as does Network, causing some short sellers to draw parallels.

But analysts at Liberum said there isn’t ‘any basis to read across from the alleged fraud in Wirecard’s UAE operations and those of Network’.

Meanwhile, AIM tiddler Bluejay Mining fell 9.5 per cent, or 1.35p, to 12.85p after announcing it had struck a distribution deal with a ‘large Asian conglomerate’.

This post first appeared on Dailymail.co.uk