Shares in UK housebuilders and banks jumped this morning on renewed optimism a Brexit deal is achievable.
Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar met yesterday, with Varadkar saying he believes a deal is possible by 31 October.
Galliford Try led the way, jumping 9.2 per cent to 687p, Persimmon rose 7.2 per cent to 2,212p and Barratt Developments was up nearly seven per cent at 627p.
The Royal Bank of Scotland rose 7.3 per cent to 210p, Lloyds jumped 6.5 per cent to 56p and Barclays climbed nearly 4.2 per cent to 155p.
HSBC, which is less exposed to the UK market, rose 1.4 per cent to 606p.
Michael Hewson, chief market analyst for CMC Markets, said; “We have come along way in the space of 48 hours from Michel Barnier saying the two sides are far apart, to Leo Varadkar and Boris Johnson seeing a pathway to a deal.
“I think the truth is somewhere in between, which means the prospect of a hard Brexit on 31 October appears to have diminished quite considerably.
While a deal remains quite some way away, the key risk of a hard Brexit has diminished and that broad uplift in risk is lifting all boats, it’s lifting all sectors that would benefit from continued seamless trade between the UK and the EU.”
Neil Wilson, chief markets analyst for Markets.com, said: “These banks have been weighed down considerably by concerns about a no-deal Brexit on the economy and the property markets. Today’s rally suggests equity investors are also feeling more confident that a deal can be done in time.”