London pre-open: Stocks to slip as pound recovers after EU says UK can delay Brexit

London stocks were set to slip at the open on Friday as sterling recovered after European leaders gave the UK a few more weeks to leave the bloc.

The FTSE 100 was called to open 19 points lower at 7,334, with sterling up 0.2% against the dollar at 1.3138, regaining some composure after the UK narrowly avoided an imminent no deal Brexit.

EU leaders agreed on Thursday to grant an extension to 22 May if Theresa May is able to get her Brexit deal through the House of Commons on a third attempt. However, if the deal is rejected again, a shorter extension to 12 April will apply, which would in theory allow Parliament to explore alternative options.

CMC Markets analyst Michael Hewson said one of these options could include the removal of May as Prime Minister.

"Two weeks ago, MPs voted in a non-binding vote to stop the UK leaving the EU without a deal, yet here we are one week away and that is precisely where we were heading," he said. With last night’s compromise MPs should be able to amend the statute book to alter the UK’s departure date, however it is only a case of departure deferred for now."

In corporate news, Smiths Group reported a decline in first-half profits and said it aims to demerge its medical devices arm by the middle of next year.

On revenue up 2% to £1.57bn in the six months to 31 January, the FTSE 100 conglomerate made £246m of operating profits, which was down 2% on an underlying basis and 1% on a reported basis.

Sanne, which provides alternative asset and corporate services, posted a rise in full-year profit and revenue thanks to strong performances from its core businesses, particularly in EMEA and the US.

In the year to the end of December 2018, underlying pre-tax profit pushed up 11.8% to £42.6m on revenue of £143m, up 26.4% from 2017.

EasyJet announced that it was standing ready to activate its Brexit contingency plan of suspending shareholders' voting rights in respect of a small number of shares, given its EU ownership had still not reached the 50% plus one share level it required.

The FTSE 100 airline said its EU, excluding UK, ownership had increased in recent weeks to 49.92%. It claimed that under new EU rules it would have six months to comply with EU ownership rules after a no-deal Brexit, adding that it planned to set a permitted maximum of non-EU ownership in accordance with its articles of association.