London open: Stocks edge lower ahead of Commons election vote; HSBC falls

London stocks fell in early trade on Monday as traders awaited the EU decision on a Brexit extension and a Commons vote on a general election.

At 0825 GMT, the FTSE 100 was down 0.3% at 7,301.82, while the pound was up 0.2% against the dollar at 1.2847 and flat versus the euro at 1.1582.

MPs are due to vote on Prime Minister Boris Johnson's plan for a 12 December election. He will need the support of two thirds of MPs in order for it to pass.

Meanwhile, EU leaders will decide whether to grant the UK a three-month Brexit extension amid reports that France has dropped its opposition to the plan.

Currency analysts at MUFG Bank said: "The EU will most likely offer the UK a flexible extension to Article 50, after France this weekend conceded to support an extension of the Brexit deadline until the 31st of January 2020. This should be modestly positive for the pound as it would eliminate the risk of a no deal Brexit occurring around the 15th of November, a delay date which France previously proposed as the only extension it would grant.

"The flexible nature of the proposal could see the UK leave the EU on three possible dates if a Brexit deal were reached - on the 30th of November, the 31st of December 2020 or the 31st of January 2020. However according to Politico this offer is conditional on the UK appointing a European commissioner as it 'will remain a Member State' until the new exit date, which PM Boris Johnson has previously said he would not countenance.

"The EU could approve this offer in Brussels today - the offer is not yet officially agreed upon, and it contains a commitment that the Withdrawal Agreement could not be renegotiated in the future."

Elsewhere, Sino-US trade relations remained in focus after China said that parts of the text for the first phase of a trade deal with the US were "basically completed" as the two sides reached a consensus in areas such as standards used by agricultural regulators.

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 was the worst performer 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.

Cairn Energy was under the cosh 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 nudged lower after it said 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.

Informa and Hastings were hit by downgrades at Goldman Sachs and JPMorgan, respectively.

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) 7,301.82 -0.31%
FTSE 250 (MCX) 20,091.80 -0.06%
techMARK (TASX) 3,885.16 -0.07%

FTSE 100 - Risers

NMC Health (NMC) 2,500.00p 1.26%
Burberry Group (BRBY) 2,041.00p 0.94%
Legal & General Group (LGEN) 272.20p 0.70%
TUI AG Reg Shs (DI) (TUI) 1,014.00p 0.65%
Persimmon (PSN) 2,364.00p 0.60%
Coca-Cola HBC AG (CDI) (CCH) 2,340.00p 0.56%
Taylor Wimpey (TW.) 168.00p 0.54%
ITV (ITV) 136.60p 0.51%
Antofagasta (ANTO) 874.80p 0.48%
Land Securities Group (LAND) 934.20p 0.47%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 600.00p -2.82%
Informa (INF) 756.60p -2.22%
Diageo (DGE) 3,087.50p -1.07%
Unilever (ULVR) 4,586.50p -0.97%
Imperial Brands (IMB) 1,802.40p -0.97%
Rentokil Initial (RTO) 437.90p -0.95%
Halma (HLMA) 1,841.00p -0.91%
Relx plc (REL) 1,831.00p -0.89%
Fresnillo (FRES) 675.60p -0.85%
Standard Chartered (STAN) 686.80p -0.75%

FTSE 250 - Risers

Drax Group (DRX) 310.00p 3.82%
Airtel Africa (AAF) 62.64p 3.53%
Stagecoach Group (SGC) 143.50p 2.14%
Senior (SNR) 189.00p 2.05%
Wetherspoon (J.D.) (JDW) 1,498.86p 1.69%
Morgan Advanced Materials (MGAM) 249.49p 1.25%
Derwent London (DLN) 3,544.00p 1.08%
IP Group (IPO) 57.50p 1.05%
Ferrexpo (FXPO) 134.85p 1.05%
Tullow Oil (TLW) 212.40p 0.95%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 449.00p -5.51%
Cairn Energy (CNE) 183.60p -4.97%
PureTech Health (PRTC) 243.56p -2.96%
Hastings Group Holdings (HSTG) 181.50p -2.63%
Rank Group (RNK) 241.38p -1.68%
Provident Financial (PFG) 442.75p -1.68%
Jupiter Fund Management (JUP) 335.80p -1.18%
Pennon Group (PNN) 889.87p -1.17%
Grafton Group Units (GFTU) 783.00p -1.07%
Crest Nicholson Holdings (CRST) 412.58p -1.06%