London close: Stocks track gains on Wall Street ahead of vote in Parliament

London stocks finished higher, tracking fresh record highs on Monday for some of Wall Street's main stock market gauges and after the EU decided to grant the UK a three-month extension to the deadline for Brexit.

"Equities in the UK and Europe are also rising – some might pin this on the UK-EU news, which has seen the EU grant a grudging extension to the UK’s EU membership. But in reality we are seeing the positive effects of earnings season filtering through – earnings beats abound, even if more than half the S&P 500 has yet to report figures," said IG's Chris Beauchamp.

"This week’s Fed meeting would also be a point of concern, since the record of market returns in the wake of this year’s meetings are not exactly encouraging. But if earnings keep beating forecasts, and if the US and China avoid a fresh fallout, then the outlook for equities into year-end still looks positive."

The FTSE 100 edged up by 0.09% at 7,331.28, while the pound was higher by 0.28% against the US dollar at 1.28625 and by 0.09% versus the euro at 1.1589 after the EU agreed to extend the Brexit deadline to 31 January 2020.

London's second-tier index meanwhile put on 0.53% to end the session at 20,210.16.

News of the EU's decision came ahead of a Commons vote on whether to hold an election on 12 December. A two-thirds majority is required for Prime Minister Boris Johnson's motion to pass.

David Cheetham, chief market analyst at XTB, said: "Speculation that the bloc would only entertain a shorter extension at the request of France had caused some doubts but it appears that once more the EU are trying hard to be seen to not force the issue.

"An election before year-end seems the most likely outcome, although there appears to be a greater chance of this occurring December 9th, rather than the government’s preferred date of December 12th. MPs will vote later on the PM's proposal but with Labour set to abstain and a two-thirds majority needed it is unlikely to pass.

"Looking at the dates it seems to be splitting hairs with the decision to try and bring it forward to Monday 9th December from Thursday 12th hardly likely to see any tangible impact from the student vote who would be heading home for Christmas given that it is the same week."

Elsewhere, Sino-US trade relations remained in focus after China said at the weekend that parts of the text for the first phase of a trade deal with the US were "basically completed", with US President Donald Trump saying come Monday that talks were running ahead of schedule.

Spreadex analyst Connor Campbell said: "A high-level phone call last Friday appears to have yielded progress - especially in the poultry sector, with the US agreeing to import cooked birds from China, while Beijing will allow American chickens back into the country."

In equity markets, HSBC exerted the biggest drag on the FTSE 100 after the bank reported a drop in third-quarter profit, cautioned over a "challenging" environment and said the outlook for revenue growth is softer than it expected at the half-year. As a result, it now longer expects to reach its return on tangible equity target of more than 11% in 2020.

Other banking stocks followed suit, with Lloyds and RBS also trading lower.

Imperial Brands lost ground after RBC Capital Markets slashed its price target on the underperform-rated stock to 1,600p from 2,100p, while Informa was knocked lower by a downgrade at Goldman Sachs.

Aston Martin Lagonda was weaker after a downgrade to 'underperform' at Bank of America-Merrill Lynch, which said it sees a "significant increase in financial risk".

Cairn Energy retreated after it said that its Alom-1 well offshore Mexico was found to be dry and has now been plugged and abandoned. The oil and gas exploration company also announced that it now expects an outcome on its long-running tax dispute with the Indian government by next summer.

Ferrexpo fell after saying that chief executive officer Kostyantin Zhevago would temporarily step down to focus on resolving matters related to one of his former businesses in Ukraine. The company has appointed chief financial officer Chris Mawe as acting CEO.

On the upside, luxury brand Burberry was on the front foot after French luxury group LVMH confirmed it had made a takeover approach for Tiffany & Co.

Market Movers

FTSE 100 (UKX) 7,331.28 0.09%
FTSE 250 (MCX) 20,210.16 0.53%
techMARK (TASX) 3,919.53 0.82%

FTSE 100 - Risers

Antofagasta (ANTO) 905.00p 3.95%
3i Group (III) 1,130.00p 3.01%
London Stock Exchange Group (LSE) 7,022.00p 2.99%
Spirax-Sarco Engineering (SPX) 7,800.00p 2.70%
Intertek Group (ITRK) 5,262.00p 2.33%
Evraz (EVR) 393.00p 2.32%
Ashtead Group (AHT) 2,321.00p 2.29%
Whitbread (WTB) 4,196.00p 2.29%
Glencore (GLEN) 239.50p 2.24%
GlaxoSmithKline (GSK) 1,736.60p 2.15%

FTSE 100 - Fallers

NMC Health (NMC) 2,363.00p -4.29%
HSBC Holdings (HSBA) 594.40p -3.73%
Imperial Brands (IMB) 1,779.60p -2.22%
Lloyds Banking Group (LLOY) 58.93p -1.78%
Hiscox Limited (DI) (HSX) 1,483.00p -1.72%
Unilever (ULVR) 4,564.50p -1.60%
Informa (INF) 762.60p -1.45%
Fresnillo (FRES) 674.40p -1.23%
Coca-Cola HBC AG (CDI) (CCH) 2,299.00p -1.20%
Severn Trent (SVT) 2,275.00p -1.09%

FTSE 250 - Risers

Vivo Energy (VVO) 129.60p 5.71%
Elementis (ELM) 152.40p 5.47%
Renishaw (RSW) 3,756.00p 5.39%
Airtel Africa (AAF) 62.60p 3.47%
IP Group (IPO) 58.80p 3.34%
Sanne Group (SNN) 554.00p 3.17%
Drax Group (DRX) 307.80p 3.08%
Sirius Minerals (SXX) 3.07p 2.95%
Micro Focus International (MCRO) 1,079.20p 2.84%
Bodycote (BOY) 718.00p 2.79%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 434.70p -8.52%
Cairn Energy (CNE) 177.50p -8.13%
Riverstone Energy Limited (RSE) 460.00p -5.64%
Ferrexpo (FXPO) 129.35p -3.07%
Centamin (DI) (CEY) 114.70p -3.00%
Apax Global Alpha Limited (APAX) 159.00p -2.75%
CYBG (CYBG) 139.20p -2.69%
Bakkavor Group (BAKK) 122.40p -2.39%
Kainos Group (KNOS) 499.00p -2.16%
OneSavings Bank (OSB) 368.80p -2.02%