That weighed on the FTSE 100, whose stocks rely on overseas markets for around three-quarters of their earnings, derailing a test of the 7,000 mark. 

The UK blue-chip index fell 73 points from that session high, down 0.2% on the day at 6,928.

News of possible Brexit day proved better news for house builders, which built on gains from an upgrade by analysts at Bank of America Merrill Lynch upgrade to top the index.

‘It seems at least possible, or even probable, that some sort of Brexit resolution is within sight and therefore the UK house building sector may see some relief,’ they said according to Reuters.

 

Taylor Wimpey (TW) was up 5.3% at 156.8p, Persimmon (PSN) rose 4.3% to £22.02 and Barratt Developments (BDEV) was up 3.2% at 504.6p.

‘Mid-cap’ house builders also rallied, helping the FTSE 250, which is more exposed to the UK domestic economy than the blue-chip index, rise 0.5%.

Bellway (BWY) rose 3.4% to £28.28 and Crest Nicholson (CRST) traded 3.2% higher at 256.8p.

Debenhams (DEBS) was the biggest small-cap faller with shares down 12.5%, to 4.2p, on the news two of the department store’s biggest shareholders – Sports Direct’s Mike Ashley and retail conglomerate Landmark Group – pushed chief executive Sergio Bucher off the board and chairman Ian Cheshire out of the group.

This follows Debenhams reporting a series of profit warnings, resulting in 80% being wiped off the company’s market value. The department store has struggled to keep pace with the changing UK high street, reinforced by a 3.6% fall in sales in the six weeks leading up to Christmas.

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Halfords (HALF) and Card Factory (CARDC) continued to fall after yesterday’s disappointing updates, down 2.2% at 212p and 1.3% lower at 165.8p respetively.

European markets joined the FTSE 100 in the red, as optimism sparked by US Federal Reserve chair Jerome Powell’s dovish tone ebbed away.

Powell yesterday reiterated the central bank would be willing to wait to implement further interest rate hikes.

‘The big message from Powell was to just underscore what he said last week in Atlanta. Monetary policy will not be dictated by the market, but the Fed is not deaf to the concerns expressed by the market,’ said Brian Jacobsen, senior investment strategist for Wells Fargo Asset Management’s Multi-Asset Solutions. 

However, Powell also warned that a prolonged US government shutdown would start to weigh on the country’s economic growth. The US government is heading into its longest shutdown on record, as President Donald Trump shows no signs on letting up on budgetary demands for his Mexican border wall.



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