London close: Deal news boosts FTSE 100 ahead of key votes in Parliament
Deal news helped push London's top-flight index higher on Tuesday, with optimism over Sino-US trade relations also lending a hand, but the second-tier index was weighed down as Prime Minister Boris Johnson's Brexit deal faced its first parliamentary hurdle.
The FTSE 100 was up 0.68% at 7,212.49, while the pound was down 0.1% against the US dollar at 1.2952 and essentially flat versus the euro at 1.1625.
Neil Wilson, chief market analyst at Markets.com, said: "Boris Johnson will seek to push through his Brexit deal with a vote on the withdrawal bill, second reading, today. The numbers are tight, but No10 thinks it has just enough support to get it through. It would be a huge breakthrough as it would mark the first time MPs approving any Brexit deal.
"If the PM fails the key vote on the Withdrawal Agreement Bill, sterling could get spun back to $1.25 in short order. If it passes, a breach of $1.32 and thence a push to $1.34 seem likely."
Wilson added: "The deal premium which has already added c7% to sterling would collapse quickly if the deal gets scuppered. That said, the market is right now quite confident that no-deal is not such a risk now as it was - this appears to be overconfident until the necessary votes are passed."
Away from Brexit, investors grew hopeful after US President Donald Trump said China had signalled that trade talks were on course for a deal in November. During a Cabinet meeting at the White House on Monday, Trump said that China had started making the purchases of US agricultural products that he had pushed for as part of a deal.
In equity markets, Just Eat surged to the top of the FTSE 100 leaderboard as investors considered the prospect of a bidding war after the online food delivery service said it had rejected an unsolicited £4.9bn cash offer from Prosus that "significantly undervalues" the company. Just Eat insisted that the all-share merger agreed with Takeaway.com in August provides its shareholders with greater value creation than the terms of the offer from Prosus, a spin-off from South African conglomerate Naspers.
Wilson said: "The Prosus offer is in many ways very cheeky and even more low-ball - it’s still under the 731p initial offer from Takeaway.com and whilst it has been rejected, will certainly up the ante and could force Takeaway.com into raising its offer as it looks in a weakened position due to the stock’s decline."
Elsewhere, Premier Inn owner Whitbread gave back early gains even as it posted a decline in half-year profits amid weaker trading conditions and high industry inflation.
Wealth manager St James's Place was up as it reported a 3.2% increase in third-quarter funds under management to a record £112.8bn.
Travis Perkins was on the back foot after saying it had paused the sale of its plumbing and heating business due to the current "unprecedented level of uncertainty" and reporting a jump in third-quarter sales.
On the downside, travel company TUI was knocked lower after Morgan Stanley downgraded its stance on the shares to 'equalweight' from 'overweight' as it cut its FY20 earnings per share estimate due to ongoing delays to the 737 MAX's return to air worthiness.
Consumer goods giant Reckitt Benckiser was weaker as it cut its full-year sales growth forecast following a "disappointing" third quarter and warned that profit margins will fall amid slowing demand for some of its products in the US and China.
FTSE 100 - Risers
Just Eat (JE.) 732.00p 24.19%
Fresnillo (FRES) 650.00p 3.34%
St James's Place (STJ) 1,042.00p 3.16%
Standard Chartered (STAN) 683.60p 2.80%
Prudential (PRU) 1,403.50p 2.75%
Rolls-Royce Holdings (RR.) 724.80p 2.60%
Burberry Group (BRBY) 1,930.50p 2.33%
Hargreaves Lansdown (HL.) 1,767.00p 2.23%
Royal Dutch Shell 'B' (RDSB) 2,277.00p 2.18%
Croda International (CRDA) 4,722.00p 2.03%
FTSE 100 - Fallers
TUI AG Reg Shs (DI) (TUI) 990.80p -7.10%
Bunzl (BNZL) 1,943.00p -2.75%
Antofagasta (ANTO) 857.60p -1.99%
ITV (ITV) 135.30p -1.95%
International Consolidated Airlines Group SA (CDI) (IAG) 515.20p -1.87%
Whitbread (WTB) 4,127.00p -1.86%
Sainsbury (J) (SBRY) 211.70p -1.72%
Ashtead Group (AHT) 2,155.00p -1.69%
Lloyds Banking Group (LLOY) 60.66p -1.68%
Legal & General Group (LGEN) 270.20p -1.53%
FTSE 250 - Risers
Provident Financial (PFG) 456.00p 4.47%
Rank Group (RNK) 239.50p 3.46%
Trainline (TRN) 448.00p 3.11%
CYBG (CYBG) 145.35p 3.09%
Premier Oil (PMO) 85.44p 2.54%
Sirius Real Estate Ltd. (SRE) 75.00p 2.18%
Domino's Pizza Group (DOM) 286.00p 1.96%
Plus500 Ltd (DI) (PLUS) 815.00p 1.90%
TP ICAP (TCAP) 340.20p 1.25%
Murray International Trust (MYI) 1,200.00p 1.18%
FTSE 250 - Fallers
Sirius Minerals (SXX) 3.13p -7.07%
IP Group (IPO) 63.70p -4.93%
Apax Global Alpha Limited (APAX) 158.00p -4.53%
Weir Group (WEIR) 1,361.50p -3.95%
Bakkavor Group (BAKK) 127.60p -3.87%
Restaurant Group (RTN) 145.60p -3.70%
CLS Holdings (CLI) 254.50p -3.60%
Ferrexpo (FXPO) 130.05p -3.56%
Playtech (PTEC) 393.00p -3.56%
Ibstock (IBST) 249.80p -3.55%