(Sharecast News) - London stocks rose in early trade on Wednesday as Prime Minister Boris Johnson headed to Brussels to discuss Brexit over dinner with European Commission President Ursula von der Leyen.
At 0840 GMT, the FTSE 100 was 0.5% higher at 6,588.61, while sterling was up 0.5% against the dollar at 1.3418 following encouraging comments from Ireland's Deputy Prime Minister Leo Varadkar and Cabinet Office minister Michael Gove.
Varadkar said earlier that he believes Britain and the EU will secure a trade deal in the coming days, putting the chances of success at around 50%. Meanwhile, Gove told the BBC that Johnson and von der Leyen could find a way forward on a Brexit trade deal.
"It is often around the table, when you have two political principals one-on-one, that you can often find a way through," he said.
CMC Markets analyst Michael Hewson said the hope is that Johnson and von der Leyen "can push back against the more hawkish voices amongst some in the EU who mistakenly think that somehow a no deal outcome is even an option to be contemplated".
"Even without the coronavirus pandemic a no deal outcome would have been a risky strategy on the part of EU leaders, particularly given the current fiscal impasse on the aid package already under consideration," said Hewson. "The EU can ill afford another economic dislocation caused by a no deal Brexit, on top of the economic devastation being wrought by Covid-19, despite all their bluster.
"What is required in the next few hours is less pig headedness and more pragmatism on the part of all parties. There will be no winners from a no deal outcome, whatever either side might tell you. If anything a no deal would be a kind of mutually assured destruction."
In equity markets, British Airways and Iberia parent IAG was the top performer, closely followed by engine maker Rolls-Royce, most likely on the back of vaccine optimism.
Housebuilders were also on the rise, with Berkeley, Taylor Wimpey and Persimmon all firmer.
Tesco gained after the supermarket retailer said it has now met all the conditions for the sale of its businesses in Thailand and Malaysia and the disposal is expected to complete later this month.
Vistry rose after the housebuilder said it would consider reinstating a "modest" final dividend and reiterated expectations for full-year pre-tax profits at the top end of a £130m to £140m range.
Software company Sage advanced after agreeing to sell its Polish business to funds advised by Mid Europa Partners for around £66m.
Kitchen and joinery products supplier Howden Joinery surged after it said full-year pre-tax profit was set to be around 10% above the top end of current analyst forecasts following continued strong trading.
Cairn Energy was boosted by an upgrade to 'buy' at Berenberg, while Royal Mail was higher after being reinstated at 'buy' at HSBC.
Market Movers
FTSE 100 (UKX) 6,588.61 0.45%
FTSE 250 (MCX) 19,959.44 0.45%
techMARK (TASX) 4,091.78 0.46%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 168.15p 4.31%
Berkeley Group Holdings (The) (BKG) 4,418.00p 2.62%
Rolls-Royce Holdings (RR.) 129.40p 2.50%
Taylor Wimpey (TW.) 160.25p 1.84%
BT Group (BT.A) 136.45p 1.75%
Tesco (TSCO) 228.40p 1.74%
Persimmon (PSN) 2,746.00p 1.67%
Compass Group (CPG) 1,475.00p 1.62%
National Grid (NG.) 886.20p 1.61%
Royal Dutch Shell 'A' (RDSA) 1,414.00p 1.54%
FTSE 100 - Fallers
Fresnillo (FRES) 1,134.50p -1.86%
British American Tobacco (BATS) 2,866.00p -1.24%
Polymetal International (POLY) 1,681.00p -1.12%
Smurfit Kappa Group (SKG) 3,416.00p -0.99%
Reckitt Benckiser Group (RB.) 6,436.00p -0.92%
London Stock Exchange Group (LSE) 8,646.00p -0.87%
JD Sports Fashion (JD.) 781.20p -0.86%
Flutter Entertainment (FLTR) 14,610.00p -0.81%
Admiral Group (ADM) 2,801.00p -0.81%
Ashtead Group (AHT) 3,275.00p -0.76%
FTSE 250 - Risers
Howden Joinery Group (HWDN) 695.80p 8.35%
Vistry Group (VTY) 905.00p 4.87%
Cineworld Group (CINE) 63.68p 4.39%
Micro Focus International (MCRO) 484.50p 2.89%
Scottish Inv Trust (SCIN) 739.00p 2.78%
Royal Mail (RMG) 336.60p 2.62%
WH Smith (SMWH) 1,628.00p 2.52%
Cairn Energy (CNE) 177.00p 1.96%
Grafton Group Ut (GFTU) 845.00p 1.75%
Babcock International Group (BAB) 319.90p 1.72%
FTSE 250 - Fallers
Network International Holdings (NETW) 303.20p -1.75%
Centamin (DI) (CEY) 124.90p -1.38%
Morgan Sindall Group (MGNS) 1,396.00p -1.27%
Indivior (INDV) 105.20p -1.22%
BMO Commercial Property Trust Limited (BCPT) 82.00p -1.20%
Fisher (James) & Sons (FSJ) 919.00p -1.18%
Kainos Group (KNOS) 1,206.00p -1.15%
Petropavlovsk (POG) 30.35p -1.14%
GCP Student Living (DIGS) 141.00p -1.12%
Provident Financial (PFG) 298.20p -1.00%