LONDON: London's mid-cap index ended lower on Thursday as Britain and the European Union extended the deadline for a Brexit trade deal, while the export-heavy FTSE 100 gained on a weaker pound and higher oil prices.
The domestically focussed FTSE 250, considered a barometer for Brexit sentiment, shed 0.6% as Prime Minister Boris Johnson and the EU's chief executive gave themselves until Sunday to seal a new pact and avoid a tumultuous Brexit in three weeks' time.
The blue-chip FTSE 100 rose 0.5%, as oil prices jumped to $50 per barrel for the first time since March on vaccine optimism and as a weaker British pound supported the export-heavy index.
Oil majors BP and Royal Dutch Shell were among the top gainers on the index.
A raft of stimulus measures coupled with vaccine optimism has helped the FTSE 250 gain nearly 54% from its multi-year lows in March, but the index is down about 10% as fears of a no-deal Brexit and spreading Covid-19 infections kept risk sentiment in check.
In company news, Mike Ashley's sportswear group Frasers jumped 12.9% after reporting a 25% rise in first-half core earnings.
Online supermarket Ocado Group fell 7.2% even as it raised its core earnings forecast for 2019-20 for the second time in two months.
"Brexit developments are affecting UK's economic outlook with most institutional investors refraining from increasing their exposure towards British equities," said Emma Wall, head of investment analysis at Hargreaves Lansdown.
"Although we see optimism among retail investors as they continue to consider positive vaccine developments as a higher driver."
The European Union also laid out contingency plans for a 'no-deal' Brexit at the end of the year to minimise disruption to air traffic and road and rail travel after talks between British and EU leaders failed to break an impasse.
Latest data showed Britain's economic recovery almost ground to a halt in October, while another report warned the domestic economy was unlikely to return to its pre-Covid-19 size until the end of 2022.
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