By Twesha Dikshit and Ragini Mathur
(Reuters) -London stocks ended at a seven-week high on Monday as the UK struck a wide-ranging deal with the European Union in the most significant reset of ties since Brexit, while a Moody’s downgrade of U.S. sovereign credit rating reverberated across global markets.
The blue-chip FTSE 100 rose 0.2%, climbing for the third straight day. The index had shed as much as 0.8% earlier in the session.
Meanwhile, the midcap FTSE 250 index closed marginally lower, snapping its seven-session winning streak.
Nearly nine years after it voted to leave the bloc, Britain’s deal with the EU included a security and defence pact, fewer restrictions on British food exporters and visitors, and a contentious new fishing agreement.
“As food exports to the EU only account for 0.4% of UK GDP, the agreement will only undo a small fraction of the damage to UK exports wrought by Brexit,” said Andrew Wishart, senior UK economist at Berenberg.
“Nonetheless, the direction of travel will reassure companies that the terms of EU market access from the UK will at worst be stable and could improve further.”
The reset follows Trump’s upending of the post-war global order, which has forced governments around the world to rethink ties on trade, defence and security.
Global markets were under pressure on Monday with longer-dated U.S. Treasury yields rising after Moody’s cut the country’s sovereign credit rating on Friday due to concerns about the nation’s growing $36 trillion debt pile.
Precious metal mining stocks firmed 1.6% as demand for safe-haven assets propped up gold prices. [GOL/]
Among stocks, Diageo fell 1% as the world’s largest spirits maker unveiled a plan to cut $500 million in costs and make substantial asset disposals by 2028, as it looks to turn around its performance and reduce debt.
(Reporting by Twesha Dikshit, Ragini Mathur and Medha Singh in Bengaluru; Editing by Leroy Leo and David Evans)
