LONDON MARKETS: FTSE 100 Pivots To End Higher As Pound Weakens After May's Brexit Speech

By Carla Mozee, MarketWatch Features Dow Jones Newswires

U.K. Prime Minister Theresa May delivers Brexit details in Italy

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U.K. stocks reversed course and rallied to the close on Friday after Prime Minister Theresa May failed to instill confidence about the continuing Brexit talks at a speech in Florence, sparking weakness in sterling.

During the speech, the U.K. leader confirmed that no exit deal is better than a bad deal, while urging the European Union, from which Britain is ending its ties, to be flexible in its approach to its future relationship with the U.K.

The FTSE 100 index finished 0.6% higher at 7,310.64, after opening in negative territory. For the week, the London benchmark booked a 1.3% advance, markings its best weekly gain since the period ended Aug. 4, according to FactSet data.

The pound was buying $1.3527, down from $1.3582 late Thursday in New York. The drop against the euro was bigger, with sterling buying EUR1.1317, down from EUR1.1375 on Thursday.

"The pound was sold off, as traders looked for hints around future access to the single market, and were disappointed not to find them in the prime minister's speech. Not even the pledge for a two-year transition period could stem the pound's losses, particularly against the euro," said Hamish Muress, currency analyst at OFX, in a note.

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"The markets want a firm commitment to a soft Brexit and future access to the single market, but it doesn't look like Theresa May will be pushing for this--at least for the time being," he added.

North Korea standoff: Equities in London and across Europe had opened in the red after North Korea's foreign minister warned that it may test a hydrogen bomb over the Pacific Ocean in response to U.S. President Donald Trump's threat to "totally destroy North Korea" if Pyongyang provoked the U.S. Trump on Thursday ordered expanded sanctions North Korea, targeting individuals or companies trading with the country.

Read:Kim Jong Un calls Trump a 'mentally deranged U.S. dotard' (http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)

"Needless to say, these comments have caused a degree of risk off in the markets with safe-havens benefiting," said analysts at FXPro in a note.

As gold prices caught haven bids, shares of gold producers Fresnillo PLC (FRES.LN) and Randgold Resources Ltd. (RRS.LN) (RRS.LN) rose 1.9% and 1.6%, respectively.

Elsewhere in the mining group, Rio Tinto PLC (RIO) (RIO) (RIO) closed up 1% as the company said it is starting an additional $2.5 billion share buyback program (http://www.marketwatch.com/story/rio-tinto-to-start-25-bln-share-buyback-plan-2017-09-22). Rio is returning proceeds from the sale of Coal & Allied to shareholders.

Stock movers: Smiths Group PLC (SMIN.LN) dropped nearly 6% as the technology company said its energy-engineering division, John Crane--which accounts for about a quarter of group revenue--continued to face challenges (http://www.marketwatch.com/story/smiths-group-pretax-profit-soars-on-wider-margins-2017-09-22). Overall, Smiths logged a 74% rise in pretax profit for fiscal 2017.

Unilever PLC (ULVR.LN) (ULVR.LN) rose less than 0.1% after the consumer-goods giant said it plans on buying Remgro Ltd.'s (REM.JO) 25.75% stake in Unilever South Africa Holdings Ltd. in a deal valued at 11.9 billion rands ($894.0 million) (http://www.marketwatch.com/story/unilever-buys-out-remgro-in-south-african-unit-2017-09-22).

EasyJet PLC (EZJ.LN) fell 0.6% after Air Berlin confirmed its in talks (http://www.marketwatch.com/story/air-berlin-in-talks-with-lufthansa-easyjet-2017-09-22) with the U.K. carrier and Germany's Deutsche Lufthansa AG (LHA.XE) to sell its airline operations.

Shares of AstraZeneca PLC (AZN.LN) (AZN.LN) gained 3% after Bernstein lifted the drugmaker to outperform from market perform, according to Dow Jones Newswires.

(END) Dow Jones Newswires

September 22, 2017 12:38 ET (16:38 GMT)