London close: Stocks finish positive as Brexit fears see sterling slip further

London stocks finished just above the waterline by the close on Monday, as the pound was dented by political woes.

The FTSE 100 ended the session up 0.08% at 7,514.93, as sterling turned 0.18% weaker against the dollar and retreated 0.14% on the euro, to $1.2480 and €1.1127, respectively.

That came after Foreign Office minister Alan Duncan resigned, ahead of Boris Johnson's expected appointment as Prime Minister this week.

“In a strong indication of what they expect is to come, two Tory MPs have already announced they will step down if Boris Johnson wins the leadership contest with Chancellor Philip Hammond and Justice Secretary David Gauke both going public yesterday with their resignations,” said David Cheetham, senior market analyst at XTB, earlier.

“Boris’s intention to deliver Brexit by 31 October deadline even if that means leaving without a deal is proving very divisive and will likely mean that he will fill the new cabinet with yes-men who are hard Brexiteers.”

The deadline for voting among Conservative Party members was 1700 on Monday, with the result expected on Tuesday.

“It would come as a huge surprise for the markets if Boris Johnson isn’t the winner of the contest and while his more hardline approach to Brexit is seen as less constructive for the pound, there’s already been quite a lot of bad news baked in,” Cheetham added.

Investors were also digesting a warning from the National Institute of Economic and Social Research, which said in its latest set of forecasts that the UK's exit from the European Union may have already pushed the nation into a technical recession.

NIESR said it expects the UK to grow 1% this year and the next if a no-deal Brexit is avoided.

In the event of an orderly no-deal Brexit, the economy is forecast to stagnate, before starting to grow again in 2021.

“The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit," NIESR said.

In equity markets, travel company Tui was ahead 4.6% on the back of an upbeat note from Stifel.

Paper and packaging companies DS Smith, Mondi and Smurfit Kappa also racked up gains, rising 2.74%, 1.52% and 1.34% respectively, as Finnish peer Stora Enso was upgraded by Nordea.

Embattled high street lender Metro Bank was 5.89% higher, as it confirmed it was in talks to sell a mortgage portfolio.

Media reports over the weekend said Metro was in talks on a £500m deal to‎ offload a mortgage portfolio back to a US hedge fund Cerberus Capital Management, from which it has bought more than £1bn of assets in recent years.

Fashion brand Ted Baker surged 13.48% after a report over the weekend that founder Ray Kelvin is considering plans to back a private-equity buyout of the company, four months after he quit following allegations of sexual harassment.

Oil majors BP and Shell gained 1.02% and 0.9% respectively, amid heightened Middle East tensions after Iran seized a British tanker last week.

JD Sports Fashion was ahead 1.01% after an initiation at 'buy' at UBS, while J Sainsbury was 0.49% higher after an upgrade to 'overweight' at Barclays.

On the downside, Premier Inn owner Whitbread was off 1.56% after the Telegraph reported that Manhattan-based specialist high-frequency trading firm Jane Street Global Trading was leading a £1.5bn bet by hedge funds against the company.

Also on Monday, Whitbread said it had completed a programme to return £2.5bn to shareholders following the sale of Costa Coffee to Coca-Cola last year.

Elsewhere, British Gas owner Centrica fell 2.19% following reports over the weekend that it is planning to slash its dividend for the second time in four years.

Market Movers

FTSE 100 (UKX) 7,514.93 0.08%
FTSE 250 (MCX) 19,648.01 0.13%
techMARK (TASX) 3,672.37 0.06%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 841.00p 4.60%
Persimmon (PSN) 2,030.00p 2.84%
Smith (DS) (SMDS) 367.00p 2.74%
Just Eat (JE.) 640.80p 2.33%
Ocado Group (OCDO) 1,220.00p 2.13%
Evraz (EVR) 657.80p 1.98%
Micro Focus International (MCRO) 1,689.20p 1.93%
United Utilities Group (UU.) 793.00p 1.93%
Rightmove (RMV) 520.60p 1.64%
Taylor Wimpey (TW.) 167.65p 1.61%

FTSE 100 - Fallers

Whitbread (WTB) 4,685.00p -4.43%
ITV (ITV) 107.00p -2.90%
Centrica (CNA) 88.28p -2.19%
DCC (DCC) 6,762.00p -1.77%
Morrison (Wm) Supermarkets (MRW) 205.70p -1.77%
St James's Place (STJ) 1,081.50p -1.50%
Carnival (CCL) 3,464.00p -1.37%
Standard Chartered (STAN) 703.60p -1.35%
Tesco (TSCO) 235.20p -1.30%
Land Securities Group (LAND) 835.00p -1.23%

FTSE 250 - Risers

Ted Baker (TED) 951.00p 13.48%
Metro Bank (MTRO) 500.00p 5.89%
Hochschild Mining (HOC) 217.00p 4.73%
PZ Cussons (PZC) 227.00p 4.61%
Hunting (HTG) 551.00p 4.45%
Ascential (ASCL) 396.20p 4.43%
Future (FUTR) 1,042.00p 3.58%
Rank Group (RNK) 161.20p 3.33%
NewRiver REIT (NRR) 175.60p 3.29%
St. Modwen Properties (SMP) 427.50p 3.14%

FTSE 250 - Fallers

PPHE Hotel Group Ltd (PPH) 1,850.00p -2.63%
Hays (HAS) 147.10p -2.58%
Beazley (BEZ) 536.50p -2.37%
TBC Bank Group (TBCG) 1,492.00p -2.36%
IP Group (IPO) 68.20p -2.30%
JPMorgan Indian Investment Trust (JII) 750.00p -2.22%
Synthomer (SYNT) 328.80p -2.20%
IG Group Holdings (IGG) 580.00p -2.16%
SSP Group (SSPG) 686.00p -2.14%
Galliford Try (GFRD) 629.00p -2.02%