London close: Shares held back as Brexit talks hit unexpected snag

London stocks were up but off earlier highs even as investors welcomed the passing of the US tax reform bill, held back by the lack of a widely-expected breakthrough in the Brexit negotiations, reportedly on the back of opposition from the DUP.

The FTSE 100 ended the session 0.53% higher to 7,338.97, while the pound was down 0.09% against the dollar at 1.3459 and 0.29% firmer versus the euro at 1.1360.

In the background, prices for 10-year Gilts continued their wild gyrations, with selling on Monday pushing the yield on the benchmark issue of that maturity higher by five basis points to 1.29%, as the White House's tax cut plans gathered pace.

"A day of rumours, claims and counter-claims has left UK investors reeling. As the session winds down in London it looks like, contrary to previous reports, that there will not be a deal between the UK and the EU. Even if there had been a deal, it is not clear whether the DUP would have accepted it.

"And then there was the unseemly rush by the leaders of Wales and Scotland, and London’s mayor, to announce that they would look to get their own special deals done. We knew Brexit would never be simple, but just how complicated it would be is still a surprise," said Chris Beauchamp, chief market analyst at IG.

Critically, according to the BBC's Laura Kuenssberg a deal between London and Brussels was "sunk" by an angry reaction from the DUP to possible concessions to Dublin.

Westminster had reportedly been prepared to accept that Northern Ireland could remain in the customs union and single European market in everything but name.

Somewhat ironically perhaps, writing in Monday's FT, Wolfgang Munchau wrote that the EU would never be able to deliver a 'deep' trade agreement.

On the economic front, the Markit/CIPS UK construction purchasing managers' index jumped to a five-month high of 53.1 for November from 50.8 in October.

With a PMI reading above 50 signalling growth, November's survey pointed to a return to growth after two consecutive quarters of contraction and was well ahead of the consensus forecast of 51.0.

A pick-up in the sector was largely confined to residential building, the survey found, with resilient demand reported and even an accelerated upturn in residential work.

Investors were also cheering news that the US Senate has voted 51 to 49 to pass a bill that will implement a slew of changes to the US tax code which will include a big cut in corporation tax to 20% from 35%.

On the corporate front, US-exposed equipment rental firm Ashtead and building materials group CRH gained on the back of the passing of the US Senate tax bill.

Broadcaster Sky was a high riser amid news that 21st Century Fox has restarted talks over a possible sale to Walt Disney.

Rio Tinto was on the front foot as it appointed non-executive director Simon Thompson as chairman with effect from 5 March 2018, succeeding Jan du Plessis.

Bus and coach operator National Express rose after saying it has enjoyed a good trading performance across all divisions in the autumn and completed two overseas acquisitions.

Budget airline Ryanair flew higher after reporting a 6% jump in traffic for last month as the load factor edged higher.

In broker note action, UBM was boosted by an upgrade from Exane BNP Paribas, while Premier Oil gushed higher after it was bumped up to 'buy' from 'hold' at Canaccord Genuity and IMI gained on an upgrade to 'buy' from Deutsche Bank.

Consumer goods giant Reckitt Benckiser was weaker after being cut to 'add' from 'buy' at AlphaValue, while Ultra Electronics was hit by a downgrade out of analysts at Bank of America-Merrill Lynch.

Market Movers

FTSE 100 (UKX) 7,338.97 0.53%
FTSE 250 (MCX) 19,935.95 0.41%
techMARK (TASX) 3,425.33 0.20%

FTSE 100 - Risers

Carnival (CCL) 4,931.00p 3.51%
Sky (SKY) 957.00p 2.80%
Ashtead Group (AHT) 1,954.00p 2.63%
Barclays (BARC) 194.25p 2.56%
Mediclinic International (MDC) 572.00p 2.42%
Convatec Group (CTEC) 204.20p 2.36%
Ferguson (FERG) 5,480.00p 2.33%
CRH (CRH) 2,604.00p 2.24%
Marks & Spencer Group (MKS) 316.20p 2.20%
TUI AG Reg Shs (DI) (TUI) 1,383.00p 1.99%

FTSE 100 - Fallers

Fresnillo (FRES) 1,273.00p -2.68%
Randgold Resources Ltd. (RRS) 6,795.00p -1.23%
Mondi (MNDI) 1,719.00p -1.21%
NMC Health (NMC) 2,818.00p -1.05%
Scottish Mortgage Inv Trust (SMT) 437.40p -0.73%
Next (NXT) 4,404.00p -0.63%
Imperial Brands (IMB) 3,055.50p -0.54%
Worldpay Group (WPG) 421.70p -0.50%
GKN (GKN) 303.00p -0.49%
AstraZeneca (AZN) 4,745.00p -0.46%

FTSE 250 - Risers

Syncona Limited NPV (SYNC) 204.80p 3.70%
Marshalls (MSLH) 439.00p 3.27%
Pets at Home Group (PETS) 173.60p 3.21%
IMI (IMI) 1,279.00p 3.15%
Dunelm Group (DNLM) 700.50p 2.85%
TBC Bank Group (TBCG) 1,596.00p 2.56%
Greencore Group (GNC) 217.30p 2.50%
Synthomer (SYNT) 486.30p 2.46%
Electrocomponents (ECM) 631.00p 2.44%
Petrofac Ltd. (PFC) 442.62p 2.41%

FTSE 250 - Fallers

Ocado Group (OCDO) 348.40p -4.15%
Hikma Pharmaceuticals (HIK) 977.50p -3.60%
Indivior (INDV) 369.70p -3.22%
Polymetal International (POLY) 867.00p -3.02%
Vedanta Resources (VED) 677.50p -2.87%
Kaz Minerals (KAZ) 736.50p -2.77%
Ultra Electronics Holdings (ULE) 1,266.00p -2.62%
Inmarsat (ISAT) 495.00p -2.37%
Serco Group (SRP) 91.90p -2.18%
Dechra Pharmaceuticals (DPH) 2,102.00p -2.10%