London close: FTSE extends gains as pound falls on Brexit angst
London stocks outperformed most of their European peers on Thursday, as sterling stumbled over continued confusion and doubts over the Brexit process.
The FTSE 100 finished up 0.6% to 7,234.33 as the pound fell 0.9% against the dollar and the euro to 1.3071 and 1.1630 respectively as the government tabled a House of Commons vote to approve Theresa May's Brexit withdrawal agreement.
Commons speaker John Bercow allowed the vote to go ahead as he said it was substantially different from the two meaningful votes as it will not cover the political declaration part of May's deal.
The government said the vote was being held as it was the last day that would allow the UK to exit the European Union on 22 May under the extension approved by the EU council last week and therefore avoiding a longer extension and elections for the EU parliament.
A day earlier, May had agreed to quit if she gets Tory party backing for her Brexit deal, while overnight MPs failed to reach a majority on any of the eight indicative votes in Parliament.
A vote on the withdrawal agreement only, said market analyst David Cheetham at XTB, "may be seen as a legal success should it get the required support but would leave opposition MPs and the public at large feeling that the government has pulled a fast one".
Cheetham felt the pound's slide was due to Northern Ireland's DUP announcement that they would not support May’s deal.
Away from Brexit, global market sentiment had earlier been given a boost by a Reuters report that the US and China have made progress in all areas of trade talks bar enforcement and intellectual property.
This evaporated amid downwardly revised US economic growth data and comments from White House economic adviser Larry Kudlow that US-China talks could go on for months.
"This is no surprise," said market analyst Chris Beauchamp at IG, "and the potential length of these talks, and indeed the never-ending Brexit situation, have become something of a running joke across markets lately. It does seem that the positive headlines are outweighed by the negative ones like today’s, although the impact has been relatively muted so far, as early gains on US markets fade away once again."
He added that the disappointing US GDP figure is likely to "put investors on edge" for weeks to come, as the next earnings season from mid-April is widely-expected to herald a further slowdown in corporate profit.
In UK equity markets, Ocado led the FTSE 100 again, setting new all-time highs, after announcing earlier in the week that it had struck a deal to team up with Australian supermarket Coles, while NMC Health was in second place as it bounced back from heavy losses the day before, with Barclays saying investors had been left scratching their heads and agreeing with those that felt the stock was currently an attractive buying opportunity.
Imperial Brands and British American Tobacco rallied on the back of upgrades from Citi. "We are upgrading both Imperial Brands and BAT to 'buy' from 'neutral' because they are still pricing in a discontinuity in earnings and cash flows, and we think that in 2019 the environment is likely to become less threatening, not more," analysts said in a note on the sector.
Chemicals company Johnson Matthey was up after saying it has secured the site for a factory and a 10-year supply of lithium to enable the chemicals group to meet customers' future commercial requirements for its new eLNO electric battery cathode materials.
On the downside, ex-dividends knocked 4.5 points off the FTSE 100 and six points off the 250, with Schroders, Bakkavor, 888 Holdings, Bovis Homes, British Land, Go-Ahead, InterContinental Hotels, Kier, Old Mutual and Prudential all in the frame.
SSE slid lower over the session after saying it expects a "significant" reduction in 2018/19 adjusted operating profit in its wholesale business. The energy group continues to assess "all options" for its retail supply arm following the collapse of the merger with Npower last year.
Motor insurance underwriter Sabre Insurance was weaker as it said full-year adjusted profit before tax decreased 3.1% to £61.9m, but statutory PBT was up 10.6% to £61.4m.
Easyjet was down as it was one of five airlines, including BA, Thomas Cook and Virgin Atlantic hit by 51 court cases involve pilots and cabin crew complaints about "toxic cabin air".
Utilities stocks were in the red as investors fretted about the potential for a UK general election and the Labour party's plans for renationalisation.
Outside the FTSE 350, Debenhams shares were all over the shop as the department store group revealed that it had achieved the requisite level of consent from its bondholders to carry out the next stage of its refinancing plans. It made no comment about the previous day's possible offer from Sports Direct.
Elsewhere, outsourcer Mitie slumped as it said in a pre-close statement that its order book is expected to have declined by around 10% over the full year.
Market Movers
FTSE 100 (UKX) 7,234.33 0.56%
FTSE 250 (MCX) 18,908.59 0.08%
techMARK (TASX) 3,499.59 0.25%
FTSE 100 - Risers
Ocado Group (OCDO) 1,359.50p 5.31%
NMC Health (NMC) 2,270.00p 3.56%
DCC (DCC) 6,710.00p 2.76%
Bunzl (BNZL) 2,521.00p 2.48%
Sage Group (SGE) 698.80p 2.43%
Johnson Matthey (JMAT) 3,185.00p 2.35%
Hargreaves Lansdown (HL.) 1,821.50p 2.33%
Imperial Brands (IMB) 2,619.00p 2.30%
AstraZeneca (AZN) 6,495.00p 2.19%
British American Tobacco (BATS) 3,152.00p 2.01%
FTSE 100 - Fallers
easyJet (EZJ) 1,118.00p -3.37%
National Grid (NG.) 855.10p -3.29%
Schroders (SDR) 2,635.00p -2.88%
Barratt Developments (BDEV) 593.60p -2.82%
Paddy Power Betfair (PPB) 5,905.00p -2.32%
Sainsbury (J) (SBRY) 232.60p -2.31%
Prudential (PRU) 1,525.00p -2.27%
United Utilities Group (UU.) 824.20p -2.00%
British Land Company (BLND) 583.80p -1.92%
Barclays (BARC) 153.08p -1.58%
FTSE 250 - Risers
Syncona Limited NPV (SYNC) 258.50p 6.60%
Games Workshop Group (GAW) 3,120.00p 5.05%
NewRiver REIT (NRR) 235.50p 4.90%
Woodford Patient Capital Trust (WPCT) 80.80p 4.66%
Clarkson (CKN) 2,405.00p 4.34%
JD Sports Fashion (JD.) 497.90p 3.73%
Equiniti Group (EQN) 207.50p 3.49%
Hochschild Mining (HOC) 205.00p 2.94%
Hill & Smith Holdings (HILS) 1,200.00p 2.92%
Indivior (INDV) 96.54p 2.70%
FTSE 250 - Fallers
Metro Bank (MTRO) 766.50p -6.12%
Kier Group (KIE) 362.40p -4.93%
Vivo Energy (VVO) 118.08p -4.77%
888 Holdings (888) 156.50p -4.75%
Just Group (JUST) 62.10p -3.12%
Bovis Homes Group (BVS) 1,072.00p -3.07%
CLS Holdings (CLI) 240.50p -3.02%
Sabre Insurance Group (SBRE) 286.00p -2.72%
Go-Ahead Group (GOG) 1,970.00p -2.57%
Aston Martin Lagonda Global Holdings (AML) 1,008.40p -2.34%