London close: Stocks little changed as investors wait on Brexit end-game
London stocks finished a touch higher on Monday in fairly quiet trade, as investors continued to keep an eye out for Brexit developments with the deadline for leaving the European Union just five days away.
The FTSE 100 was up 0.1% at 7,451.89 and the second-tier index off by 0.11% to 19,517.21, while the pound was 0.16% firmer against the US dollar at 1.3055 and down by 0.29% versus the euro to 1.1591.
Ahead of a key EU leaders' summit on Wednesday, Prime Minister Theresa May was due to meet with the German Chancellor and French President the next day, to make her case for another short extension of Article 50 to 30 June. However, EU Council President Donald Tusk said last week that he would formally tell the EU to endorse a long extension until 31 March 2020, which could be terminated if the Withdrawal Agreement was accepted and ratified by the House of Commons.
Meanwhile, talks between Labour and May and her team were set to continue later on Monday as they attempt to break the Brexit deadlock.
“The ball’s in the government’s court,” shadow Brexit secretary Keir Starmer told the BBC, “we haven’t seen a change of position from the government.”
IG market analyst Joshua Mahony felt the government's tone appeared to have softened but the lack of any resurgence in the pound was "very telling", he said, "for there is also a strong possibility that what we are seeing is merely a way to blackmail Brexiteers into line over May’s deal".
Analysts at Danske Bank said their base case was for the EU to grant the UK a year-long extension with the flexibility to leave earlier if and when the Withdrawal Agreement is passed. They assigned a 75% probability to this scenario and just a 10% to the probability of a short extension.
With Brexit hogging the limelight, signs of improvement in US-China trade relations did little to boost the tone after Trump's economic adviser Larry Kudlow said the two sides were getting closer to a deal and that top tier officials will meet for talks again this week. Reports out earlier suggested that China is set to cut import duties on a range of goods from textiles and sports goods to computers and digital cameras.
In oil markets, Brent crude hit its highest level this year, breaching the $70 a barrel level as tensions in Libya escalated, increasing the risk of supply disruptions. "The turmoil in the oil-rich North African country is adding to the already tightening oil market where supplies are curtailed because of OPEC production cuts and US sanctions on Iran and Venezuela," said City Index analyst Fiona Cincotta.
Oil giants and BP and Shell didn't make too much headway, however, with shares in both up half a percent.
Elsewhere, Centrica reversed early gains alongside report over the weekend that Greencoat Capital is in talks to launch a new fund targeting the planned £4bn selloff of a minority stake in the UK's seven nuclear reactors from EDF Energy and Centrica.
Shares of Debenhams, which is due to go into administration later in the day unless an alternative deal is agreed, finished sharply lower, even as Sports Direct boss Mike Ashley offered to underwrite a £150m rights issue at the department store chain but only if it appoints him as chief executive. The billionaire Newcastle United boss demanded that Debenhams' lenders agree to write-off £148m of the department store group’s debt.
Energean Oil and Gas gained as it announced the successful completion of drilling operations of the extended reach well EA-H3 at Epsilon.
Indivior advanced as it said a clinical study has shown that patients with moderate to severe opioid-use disorder may benefit from higher maintenance dose of its Sublocade monthly injection for the treatment of moderate to severe opioid use disorder.
Saga was hit by a downgrade to 'neutral' from 'buy' at UBS while Aston Martin Lagonda was knocked lower by a downgrade to 'hold' from 'buy' at Deutsche Bank.