STERLING'S rally held back London's top shares again on Thursday, after more political upsets prompted traders to hope for more roadblocks in the way of a hard Brexit.

The resignation of Boris Johnson's brother Jo as both a minister and MP added an extra boost to the pound following a series of commons defeats reduced the chances of a no-deal Brexit on October 31.

The currency rose 0.68% against the US dollar to 1.233, while versus the euro it jumped 0.59% to 1.116.

Lukman Otunuga, senior research analyst at FXTM said the recovery was by no means stable, with the pound remaining highly sensitive to Brexit news.

"EU officials have stated that the latest Brexit negotiations are going nowhere as the UK has not yet presented any 'concrete proposal' to replace the Irish backstop," he said.

"If Brussels simply refuses Johnson's request for a third extension to Britain's EU membership, fears of a no-deal Brexit will return with a vengeance, ultimately punishing sterling."

The rise contributed to the FTSE 100's decline, because the blue-chip index comprises many multinational companies which benefit from a weaker pound.

The FTSE 100 dropped 40.09 points, or 0.55%, to 7,271.17.

It was behind its European peers, as the German Dax jumped 0.85% and the French Cac climbed 1.08%.

Meanwhile the global mood was slightly brighter amid hopes of progress between the US and China on their trade row.

News that Beijing and Washington are to hold high-level talks in October boosted markets including oil, which shot higher.

At the close, a barrel of Brent Crude oil was trading at $61.86, up 2.38%.

In company news, turnaround specialist Melrose saw shares jump 16.3p higher to 201.8p after it unveiled narrowed losses thanks to a doubling of revenues led by its controversial £8 billion takeover of GKN.

Shares in CYBG have hit a record low of 108.3p after the bank warned it would take a hit of up to £450 million on payment protection insurance (PPI) costs.

By the time the market closed, shares were down 29.95p at 110p.

High street retail giant Dixons Carphone suffered a stinging shareholder revolt over pay after almost a quarter of investors rebelled at the company's annual general meeting.

Shares were up 1.4p to 115.5p at the end of the day.

Shares in online fashion retailer Boohoo rose 36.7p to 280p when it said its sales for the year will be higher than previously expected after they soared during the summer.

Jet2 owner Dart Group said it was "optimistic" about matching market forecasts for the year, despite saying it is "very cautious in its outlook" because of the potential impact of Brexit.

The company's shares dipped 1.5p to 738.5p.

The biggest risers on the FTSE 100 were Melrose Industries up 16.3p higher to 201.8p, NMC Health up 163p to 2,759p, St James's Place up 46.8p to 971.6p and ITV up 4.8p to 121.2p.

The biggest fallers on the FTSE 100 were Fresnillo down 44.2p to 723p, Diageo down 121p to 3,489p, BHP Group down 55.8p to 1,750.6p and Relx down 58p to 1,940p.