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U.K. stocks got a lift at the start of a short holiday week, as the pound eased up against major rivals, giving some equities a chance to move higher.
Sterling GBPUSD, -0.5769% fell 0.5% to $1.2939 on Monday, while the FTSE 100 UKX, +0.54% gained 0.5% to 7,620.14. Many of the top companies in the FTSE 100 generate the bulk of revenue outside of Britain, so their stock prices rise when sterling falls. Also benefiting from sterling weakness were companies on the more domestically focused FTSE 250 index MCX, +0.98%, which rose 0.9% to 21,870.19.
The pound has gained 5% in the final quarter of the year, as Prime Minister Boris Johnson’s solid election victory assured many that the government will be able to push through its exit from the European Union. However, recent revelations that Johnson won’t extend any transition period have some fearing that the end of 2020 will bring a hard exit from the EU, and that has caused some to cash in on those sterling gains.
Among companies, oil names were driving the upside in London, with Royal Dutch Shell Group RDS.A, -1.22% RDS.B, -1.09% up 0.5%. Elsewhere, consumer goods company Unilever ULVR, +2.00% UL, +0.30% gained 1.9%, while drinks group Diageo DGE, +1.50% rose 1.2%.
Shares of NMC Health NMC, +34.41% surged 33% after the U.A.E.-based health care group launched an independent review of its books. The company is looking to reassure investors after U.S. short seller Muddy Waters last week raised “serious doubts” about its finances, which wiped more than £2 billion off its market value.
U.K. markets will close early for Christmas Eve on Tuesday, and then not reopen until Friday.
