The pound dropped after uncertainty in Westminster, with Theresa May offering to resign if MPs vote for her Brexit plan (Tolga AKMEN)

London (AFP) – The pound dropped on Thursday, weighed down by ongoing chaos in Brexit proceedings, dealers said.

London’s stock market rose, however, buoyed by the weaker currency, while eurozone equity markets also enjoyed modest gains.

British Prime Minister Theresa May will renew attempts to push through her Brexit plan on Thursday, one day after she dramatically offered to quit to save her deal and MPs failed in their own bid to break the deadlock.

“With no clear way out of the Brexit labyrinth in sight, sterling struggled out of bed on Thursday, while the European indices nudged higher despite the overnight fears surrounding the global economy,” noted Connor Campbell, analyst at Spreadex trading group.

“The weary state of sterling, alongside a decent showing from its commodity stocks, allowed the FTSE to climb… enough to push the UK index to a near one-week peak.”

Wall Street started higher, defying economic worries that were further stoked Thursday when the US government revised growth down by a sizeable 0.4 percentage points to 2.2 percent for the final quarter of 2018.

– US and China resume talks –

Instead investors took heart from reports of “US/China trade progress on significant structural issues”, analysts at Charles Schwab said.

Top Chinese and US negotiators held their latest round of trade talks in Beijing, with hopes the two economic superpowers can find a deal to end their long-running tariffs row.

Earlier Thursday, Asian stock markets were gripped by volatility as investors grow increasingly worried about the state of the global economy, sending them rushing to haven assets and fuelling talk of possible recession.

Tokyo’s main stocks index sank 1.6 percent, with exporters hit by a jump in the haven yen currency, while Shanghai shed almost one percent.

After a stellar start to the year, equities are beginning to stumble with closely watched sovereign bond yields — key indicators of the state of the economy — flashing a warning.

The yields on government bonds, considered a watertight investment in times of turmoil and uncertainty, have tumbled around the world while central banks are becoming more dovish on their outlooks.

This is most notable in the United States, where the Federal Reserve has lowered its rate hike expectations and 10-year Treasury bond yields are below those of three-month notes.

The last time this happened was before the 2008 global financial crisis.

– Key figures around 1345 GMT –

London – FTSE 100: UP 0.9 percent at 7,258.22 points 

Frankfurt – DAX 30: UP 0.5 percent at 11,476.15 

Paris – CAC 40: UP 0.4 percent at 5,320.78

EURO STOXX 50: UP 0.4 percent at 3,334.86

New York – Dow: UP 0.3 percent to 25,695.56

Tokyo – Nikkei 225: DOWN 1.6 percent at 21,033.76 (close)

Hong Kong – Hang Seng: UP 0.2 percent at 28,775.21 (close)

Shanghai – Composite: DOWN 0.9 percent at 2,994.94 (close)

Pound/dollar: DOWN at $1.3093 from $1.3189 at 2100 GMT

Euro/pound: UP at 85.69 pence from 85.26 pence

Euro/dollar: UP at $1.1249 from $1.1217

Dollar/yen: DOWN at 110.78 yen from 110.51 yen

Oil – Brent Crude: DOWN 77 cents at $66.47 per barrel

Oil – West Texas Intermediate: DOWN 58 cents at $58.82 per barrel

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