Markets

European stocks close slightly higher as UK lawmakers cast doubt on Brexit deal

Key Points
  • A last-gasp deal on Britain's departure from the EU has been provisionally agreed upon.
  • The draft will need approval from the 27 European leaders who meet on Thursday, before requiring ratification from the British parliament.
  • The Democratic Unionist Party (DUP), a key ally of U.K. Prime Minister Boris Johnson's government, said in a statement that it could not approve the customs and consent arrangements relating to Northern Ireland in the proposed deal put forward by the U.K.

European stocks gave up earlier gains on Thursday as British lawmakers cast doubt on a draft Brexit deal agreed between the U.K. and the European Union.

The pan-European Stoxx 600 closed provisionally 0.1% higher by Thursday's close, with healthcare and financial services stocks leading gains while food and beverages incurred the heaviest losses, slipping 0.8% lower.

The European blue-chip index had initially jumped 0.7% after British Prime Minister Boris Johnson tweeted that a "great new deal" had been reached before European Commission President Jean-Claude Juncker confirmed the agreement.

Sterling hit a five-month high of $1.2949 in the aftermath of the announcements but was back down at $1.2860 by late-afternoon as doubts emerged as to whether Johnson will be able to get the deal approved in a vote the British Parliament on Saturday.

The Democratic Unionist Party (DUP), a key ally of Johnson's government, confirmed in a statement Thursday that it will vote against the deal, which it claims "drives a coach and horses" through the Good Friday Agreement (GFA). The GFA is a legal truce that restored peace at the border between Northern Ireland and the Republic of Ireland.

Stateside, U.S. and Chinese trade negotiators are working on phase one of a trade deal text to be presented to presidents Donald Trump and Xi Jinping, according to U.S. Treasury Secretary Steven Mnuchin.

Back in Europe, the European Central Bank (ECB) plans to implement a substantial stimulus package in full despite disagreements within its Governing Council over the move being made public, according to French central bank president Francois Villeroy de Galhau. However, he added that a broader review of the bank's policy framework is welcome.

U.K. retail sales data came in flat for the third quarter, losing momentum as British department stores disappointed.

Stocks on the move

WH Smith shares jumped 5.8% after the British retailer announced that it would buy Marshall Retail for $400 million in a bid to expand its presence in U.S. airports.

Ericsson, Elisa and Tele2 shares all jumped sharply after reporting strong third-quarter earnings, Ericsson leading the way with a 6% gain.

Earnings news also dominated the bottom of the European blue-chip index, with Swiss software company Temenos plunging 15% after missing expectations. British price comparison site Moneysupermarket also fell 10.3% after its third-quarter trading statement.