London midday: Investors sit on their hands ahead of Brexit deal vote

Stocks were continuing to trade around the unchanged mark come midday, reflecting investor caution ahead Saturday's key vote in Parliament on the Brexit deal that was agreed just the day before between the UK and the European Union.

In the background meanwhile, investors were digesting economic data out of China showing the slowest pace of expansion since the early 1990s.

As of 1201 BST, the FTSE 100 was trading 0.01% higher to 7,189.36 while the second-tier index was up by 0.15% at 20,250.74, while the pound had stabilised to trade flat against both the US dollar and the European single currency on the back of relatively hawkish remarks from Bank of England deputy governor, Dave Ramsden.

Speaking to Bloomberg, Ramsden said that the Brexit deal, if it passed muster in Parliament, would pave the way for "gradual but limited" interest rate hikes.

Echoing that sentiment perhaps, overnight the International Monetary Fund's new chief, Kristalina Georgieva, told an audience at the IMF's annual meeting in Washington that she had "jumped for joy" when she learned of the new Brexit deal, saying that it would spare Britain significant economic damage.

But analysts in the UK were more divided, with Janus Henderson fund manager, Paul O'Connor, telling Reuters that "investor celebration of this might soon be dampened by the recognition that this is a fairly hard Brexit."

Michael Hewson, chief market analyst at CMC Markets UK on the other hand was more upbeat, saying: "Amidst all the excitement around yesterday’s EU, UK Brexit deal it was easy to forget that the US and China are also trying to settle their own differences, at a time when China’s economy is showing a lot more stresses than the US economy."

Would Johnson's Brexit deal fare better in Parliament than his predecessor's? Analysts at Rabobank believed that "anything was possible" at this stage.

"Logic reasoning suggests Saturday’s vote will fail, but sentiment and Brexit fatigue may still play into the hands of Johnson, swaying sufficient MP’s to his side," Rabobank's Elwin de Groot said in a research note sent to clients.

"In that sense, anything seems possible at this stage and that’s probably why the market’s reaction has been volatile but lethargic at the same time."

In the background, data from China's National Bureau of Statistics revealed that the year-on-year rate of growth in the country's gross domestic product slowed from a clip of 6.2% for the second quarter to 6.0% over the three months ending in September (consensus: 6.1%) - the slowest pace since the early 1990s.

On a more positive note, separate figures showed that industrial production and retail sales grew more quickly than expected last month, albeit not fixed asset investment.

For later in the session, a live interview from Bloomberg with Bank of England Governor Mark Carney was scheduled for 1730 BST.

And in the States, a flurry of Fed speakers were set to take to the podium, including Dallas Fed chief, Robert Kaplan, at 1400 BST, followed by Esther George of the Kansas Fed at 1505 BST and Fed vice chairman, Richard Clarida, at 1630 BST.

No major economic releases were scheduled in the UK, euro area or in the States.

HK protests drag on InterContinental Hotels Group

The protests in HK saw InterContinental Hotels Group's RevPar crater by 36.0% in the third quarter, driving a 6.1% fall for the Greater China region, instead of the 2.2% drop which analysts at Morgan Stanley had penciled in. In turn, total RevPAR shrank by 0.8% at constant exchange rates (Morgan Stanley: -0.1%), while at the prevailing exchange rates it fell by 1.9%. The hotels group also reported a smaller than expected year-on-year increase in its net system size of 4.7% to reach 865,000 rooms (Morgan Stanley: 873,000), with management stating that openings were impacted by a later phasing than in the comparable year ago period.

Third quarter income at the London Stock Exchange rose 12% to £587m driven by a strong performance in its clearing division. Gross profit for the period rose 14% to £529m as the company said its planned £22bn takeover of data provider Refinitiv was still expected to complete in the second half of 2020.

Avast reported third quarter adjusted revenue growth of 5% to £220.3m, consistent with the expectations laid out in its half year results in back in August.The global cybersecurity provider consequently reaffirmed its full year guidance for adjusted revenue to be at the upper end of high single digit growth, when excluding FX, discontinued business and the sale of its managed workplace business.

Dechra Pharmaceuticals said it remained confident about its prospects for the current financial year in a trading update on Friday. The FTSE 250 company, which was holding its annual general meeting later in the day, said work was continuing to resolve the supply issues it had previously highlighted, with many of those having now been mitigated. It said it would announce its interim results for the six months ended 31 December on 24 February.

Market Movers

FTSE 100 (UKX) 7,189.86 0.10%
FTSE 250 (MCX) 20,247.82 0.13%
techMARK (TASX) 3,824.76 0.04%

FTSE 100 - Risers

Aviva (AV.) 419.60p 2.84%
Berkeley Group Holdings (The) (BKG) 4,564.00p 2.31%
Centrica (CNA) 71.26p 2.18%
Imperial Brands (IMB) 1,873.80p 1.95%
Tesco (TSCO) 246.70p 1.69%
Persimmon (PSN) 2,408.00p 1.69%
Ashtead Group (AHT) 2,157.00p 1.32%
Royal Bank of Scotland Group (RBS) 235.20p 1.29%
Standard Life Aberdeen (SLA) 289.30p 1.26%
Smurfit Kappa Group (SKG) 2,474.00p 1.23%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 4,612.00p -2.64%
Rolls-Royce Holdings (RR.) 711.20p -2.52%
Evraz (EVR) 386.90p -1.60%
Auto Trader Group (AUTO) 530.00p -1.45%
Burberry Group (BRBY) 1,888.50p -1.38%
Relx plc (REL) 1,761.50p -1.32%
Ocado Group (OCDO) 1,344.00p -1.25%
Johnson Matthey (JMAT) 2,994.00p -1.16%
Bunzl (BNZL) 1,962.50p -1.13%
Rentokil Initial (RTO) 448.30p -1.04%

FTSE 250 - Risers

Avast (AVST) 389.40p 5.41%
SIG (SHI) 118.80p 3.30%
Senior (SNR) 181.39p 3.06%
Drax Group (DRX) 303.27p 2.80%
Bodycote (BOY) 683.50p 2.47%
Provident Financial (PFG) 440.20p 2.32%
Grafton Group Units (GFTU) 799.50p 2.30%
WH Smith (SMWH) 2,258.00p 2.17%
Spirent Communications (SPT) 202.61p 2.12%
Travis Perkins (TPK) 1,487.50p 2.06%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 484.40p -2.98%
CLS Holdings (CLI) 259.00p -2.81%
Apax Global Alpha Limited (APAX) 157.50p -2.78%
Worldwide Healthcare Trust (WWH) 2,475.02p -2.75%
PPHE Hotel Group Ltd (PPH) 1,810.00p -2.69%
Sabre Insurance Group (SBRE) 299.00p -2.45%
CYBG (CYBG) 133.90p -2.37%
Vivo Energy (VVO) 117.20p -2.33%
Micro Focus International (MCRO) 1,111.00p -2.22%
Centamin (DI) (CEY) 108.10p -1.91%