London midday: Miners lift FTSE but Brexit vote keeps lid on gains

London stocks were holding onto most of their early gains on Friday as investors and the pound oscillated ahead of the parliamentary vote on Theresa May's proposed EU withdrawal agreement.

Up 0.3% to 7,257.96, the FTSE 100 was lifted as the mining sector climbed on the back of positive reports on US-China trade talks, with senior representatives from Washintgon saying that talks had been "constructive".

A pick-up in the pound pared back some of the equity benchmark's early gains, with sterling up 0.5% against the dollar at 1.3111 and 0.3% higher on the euro at 1.1663, reversing earlier falls.

MPs kicked off the Brexit debate mid-morning and the voting was scheduled to start at 14:30 GMT.

Sterling may be banking on the likely third failure of Theresa May’s withdrawal agreement leading to a substantial delay rather than a no-deal exit, said market analyst Connor Campbell at Spreadex. "Beyond that, it is quite hard to see what may have prompted to its sudden perking up."

Analysts at ING said the course of events over the next two weeks was "highly uncertain", although in their opinion a softer form of Brexit remained the most likely scenario, albeit only narrowly, followed by a second referendum.

"However, the odds of 'no deal' and a general election appear to have climbed," they said.

Those same analysts put the odds of May's deal passing at 10%, of a softer Brexit at 25%, of a 'no deal' Brexit also at 25% and of a general election at 15%.

In order to circumvent the Speaker of the House's procedural objections to an identical third vote on the Prime Minister's proposed deal, MPs will vote only on the withdrawal agreement, which covers the post-Brexit transition period, the Irish backstop and EU citizens' rights, and so will ignore the political declaration element. The Labour party position is that it is impossible to separate the two elements in a vote.

There is thought to be little to no chance of the government winning the vote, however.

DATA OVERSHADOWED

Amid the focus on Brexit, investors seemed to pay little attention to confirmation from the Office for National Statistics that gross domestic product fell to 0.2% in the fourth quarter of last year from 0.7% in the third.

Overnight, mortgage lender Nationwide reported a month-on-month increase of 0.2% in UK house prices during the month of March.

That pushed the year-on-year rate of growth up from 0.4% during the previous month to 0.7% (consensus: 0.5%).

According to Samuel Tombs at Pantheon Macroeconomics, the steady levels of mortgage approvals seen year-to-date, together with signs that wages could continue to grow at a 3% pace and only gradual increases in mortgage rates pointed to year-on-year growth in house prices recovering to about 2% by the end of 2019.

For later in the the session, a raft of economic reports are scheduled for release in the States, including data on personal income and spending for January and February and the Chicago NAPM regional manufacturing sector Purchasing Managers' Index.

On London's equity markets, miners were leading the way, with Antofagasta sitting atop the Footsie, with Glencore and Anglo American not far behind.

Travis Perkins shares were flat after it announced that chief executive John Carter will step down in August after five years in the role and be succeeded by Nick Roberts, currently CEO of engineer Atkins.

TUI was trading sharply lower after the Anglo-German tour operator said that the grounding of the 737 MAX Boeing aircraft in its fleet would subtract €200-€300m from its full-year operating profits, depending on whether the jets would be back in the air by mid-July or September. In the meantime, the tour operator was scrambling to rectify the situation, utilising spare jets, renewing expiring leases and leasing additional aircraft. EasyJet shares were also lower.

AstraZeneca was bottom of the blue chip list as it announced plans to raise $3.5bn (£2.7bn) in a share placing to fund a new cancer drug collaboration with Japan's Daiichi Sankyo and repay some of its bonds. The collaboration is for a novel antibody-drug conjugate, trastuzumab deruxtecan, which is hoped will treat breast and other cancers.

Software company Micro Focus International was slightly in the red as it reiterated its previous guidance for the financial year ahead of its annual general meeting. Guidance was for further moderation of revenue decline, and consequently constant currency revenue of between -4% and -6%, compared to a decline of 7.1% for the prior financial year.

Market Movers

FTSE 100 (UKX) 7,257.96 0.33%
FTSE 250 (MCX) 18,997.78 0.47%
techMARK (TASX) 3,480.79 -0.54%

FTSE 100 - Risers

Antofagasta (ANTO) 959.40p 2.90%
CRH (CRH) 2,354.00p 2.57%
Glencore (GLEN) 318.75p 2.29%
Smith (DS) (SMDS) 334.50p 2.20%
Hargreaves Lansdown (HL.) 1,863.50p 2.19%
Standard Life Aberdeen (SLA) 263.70p 2.15%
Barratt Developments (BDEV) 606.20p 2.12%
Smurfit Kappa Group (SKG) 2,140.00p 2.10%
Schroders (SDR) 2,690.00p 2.09%
Anglo American (AAL) 2,033.50p 2.07%

FTSE 100 - Fallers

AstraZeneca (AZN) 6,066.00p -6.62%
TUI AG Reg Shs (DI) (TUI) 721.80p -6.24%
Hikma Pharmaceuticals (HIK) 1,736.50p -2.06%
Johnson Matthey (JMAT) 3,120.00p -2.04%
Paddy Power Betfair (PPB) 5,785.00p -2.03%
Auto Trader Group (AUTO) 520.40p -1.03%
Ocado Group (OCDO) 1,347.50p -0.92%
Smith & Nephew (SN.) 1,508.50p -0.53%
Unilever (ULVR) 4,378.00p -0.51%
Micro Focus International (MCRO) 1,979.50p -0.50%

FTSE 250 - Risers

Vivo Energy (VVO) 123.44p 4.54%
Man Group (EMG) 136.05p 4.01%
Jupiter Fund Management (JUP) 359.90p 3.69%
Kaz Minerals (KAZ) 643.40p 3.54%
Premier Oil (PMO) 93.75p 3.53%
Plus500 Ltd (DI) (PLUS) 743.50p 3.41%
Babcock International Group (BAB) 502.60p 3.29%
Tullow Oil (TLW) 237.50p 3.26%
Ascential (ASCL) 352.20p 2.86%
Royal Mail (RMG) 240.90p 2.86%

FTSE 250 - Fallers

Kier Group (KIE) 353.00p -2.59%
Contour Global (GLO) 164.00p -2.15%
Metro Bank (MTRO) 751.00p -2.02%
Victrex plc (VCT) 2,136.00p -1.93%
HGCapital Trust (HGT) 2,050.00p -1.91%
Stagecoach Group (SGC) 152.80p -1.74%
Convatec Group (CTEC) 139.85p -1.72%
Indivior (INDV) 95.16p -1.43%
Provident Financial (PFG) 513.00p -1.38%
Apax Global Alpha Limited (APAX) 143.00p -1.38%