STERLING was still suffering under the weight of political uncertainty on Tuesday despite an intensive effort from Prime Minister Theresa May to reboot Brexit talks.
The pound was 0.2 per cent lower versus the US dollar at 1.34, but had picked up from the lows seen earlier in the session after Brexit secretary David Davis insisted Northern Ireland would not be "left behind" in the single market and customs union after Brexit.
The UK currency was enjoying a stronger session against the euro up 0.2 per cent at 1.13, while the FTSE 100 Index fell 11.47 points to 7,327.5.
The Irish premier Leo Varadkar said "the ball is now in London's court", after Mrs May pulled out of a proposed deal when the Democratic Unionist Party (DUP) made clear it would not accept proposals for "regulatory alignment" with the Republic.
Connor Campbell, Spreadex financial analyst, said: "David Davis' suggestion that the post-Brexit 'regulatory alignment' sought for Northern Ireland and the EU would apply to the UK as a whole seems to have lifted the pound from its lows this Tuesday."
Across Europe, Germany's Dax was up 0.2 per cent and the Cac 40 in France dropped by 0.3 per cent.
On the oil markets, Brent crude was one per cent higher at $63.06 as it rebounded from a slump in the previous session when investors reacted to a jump in the US oil rig count.
In UK stocks, British supermarkets were sitting among the biggest risers following a broker upgrade from Goldman Sachs.
Shares in Tesco were up 5.9p to 201p, while Sainsbury's rose 6.4p to 239.3p and Morrisons climbed 4.8p to 218.8p.
David Madden, market analyst at CMC Markets, said: "Goldman Sachs wrote an optimistic note about the UK supermarket sector, and in turn we have seen a push higher in the share price of Sainsbury's, Tesco and Morrisons.
"The investment bank stated that Adli and Lidl are no longer as aggressive as they once were when it comes to slashing their prices.
"Goldman Sachs predicts that profit margins will improve next year, as they feel the gap between consumer prices for foods and input costs are falling."
However, this boost to the London market was cancelled out after the mining giants took a tumble in response to a drop in the copper price.
Anglo American was the biggest faller, dropping 34p to 1,351p, as Glencore sank 7.8p to 334p.
Plumbing supplier Ferguson was also down after a challenging UK market dragged on its performance in the first quarter.
The group, formerly known as Wolseley, reported a 10 per cent rise in revenue to $5.2 billion (£3.8bn) in the three months to October 31, while trading profit was up 14 per cent to $394m (£293m).
But in the UK, despite revenue growing 3.4 per cent to $679m (£506m), profit came in 3.8 per cent lower at $21m (£15.6m).
This contrasted to the US, Canada and Central Europe, where profit rose.
Shares dropped one per cenr, or 60p to 5,420p.
The biggest risers on the FTSE 100 Index were Standard Chartered up 22p to 749.2p, Tesco up 5.9p to 201p, Sainsbury's up 6.4p to 239.3p, Whitbread up 99p to 3,710p.
The biggest fallers were Anglo American down 34p to 1,351p, Glencore down 7.8p to 334p, St James's Place down 25p to 1,175p, Rio Tinto down 71.5p to 3,468.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here