LONDON (Reuters) - UK shares ended Friday in the red, as a deepening oil rout brought a tentative rally earlier in the day to a halt and investors moved to the sidelines before a key EU summit on Sunday.
EU negotiators met to try to clear the last hurdle before a Sunday summit is due to endorse the British government’s Brexit deal, but the gathering ended without agreement after Spain’s 11th-hour objection over Gibraltar.
With the legal divorce treaty and an accompanying political declaration on future ties due to be rubber-stamped on Sunday, investors moved to the sidelines.
“With Sunday’s EU-UK Brexit Summit back on after yesterday’s progress, any soundbites on remaining resolutions, be it actual progress or hopes thereof, as well as threats or actual spanners in the works, could keep GBP and thus the FTSE and its components on edge into the weekend,” said Accendo Markets analyst Mike van Dulken.
Mining stocks .FTNMX1770 dropped to four-week lows, with Fresnillo (FRES.L) at the bottom of the FTSE 100 at 2-1/2-year lows. The oil index .FTNMX0530 hit its lowest since April as the crude rout deepened, with Brent falling below $60 per barrel on continued concerns about a rising glut.[O/R]
Heavyweight Shell (RDSa.AS) fell 3.8 percent.
Software firm Sage Group (SGE.L), up 2.9 percent, recovering from three-year lows hit earlier in the week following its results.
The big moves among the mid- and small-cap companies were driven by M&A and earnings news.
Ibstock (IBST.L) jumped 8.3 percent to the top of the FTSE 250 .FTMC after it sold its U.S. brick business in a deal worth $110 million. The company said it will use the proceeds to repay debt. Peel Hunt upgraded the company to 'buy'.
Flybe FLYB.L shares took off after Sky News reported that Virgin Atlantic is in talks to buy the UK-listed regional airline a week after the company said it was in talks to sell itself.
The stock ended up more than 70 percent for a record daily gain. They have lost almost half their value so far this year as the company grapples with higher fuel costs, lower demand and a weak British pound.
Interserve IRV.L sank 5.6 percent after the construction and services company warned debts will rise more than expected amid project delays and a weak building market.
Reporting by Josephine Mason; Additional reporting by Helen Reid; Editing by Alison Williams