FTSE 100 muted on Brexit fears; miners jump on record iron ore prices

London's FTSE 100 was muted on Thursday as Brexit negotiations remained stuck with only weeks left for Britain's transition period to expire, while miners jumped as iron ore prices hit a record high.

The blue-chip FTSE 100 was down 0.1pc after gaining more than 3pc in the past two sessions, while the mid-cap FTSE 250, considered a barometer of Brexit sentiment, rose 0.1pc.

The European Union's chief Brexit negotiator told member states' envoys that talks on a trade deal were reaching "a make-or-break" moment.

Four diplomats told Reuters that the talks remained snagged on issues including fishing rights.

"I think they (the UK and the EU) will manage a bare-bones agreement," Esty Dwek, head of global markets strategy at Natixis Investment Managers, told the Reuters Global Markets Forum.

"The outlook assumes such an agreement, but the virus impact means growth will still suffer and have Brexit costs in 2021."

The FTSE 100 has tracked a recent rally in global equity markets to end November with its best monthly performance in more than three decades as signs of a working COVID-19 vaccine raised hopes of a faster economic rebound next year.

Although the UK became the first country in the world on Wednesday to approve a vaccine, investor sentiment has been subdued on concerns around the near-term damage to the economy with coronavirus-related business restrictions set to stay in place.

"In the short term, we expect the downturn to continue as measures are being extended," said Bert Colijn, a senior euro zone economist at ING.

In a bright spot, data on Thursday showed activity in Britain's services sector fell less than expected in November.

In company news, Paragon Banking Group jumped 6.1pc to the top of the FTSE 250 as it said the disruption to lending from the virus outbreak had largely played through the business.