London close: Stocks see timid bounce as investors weigh PM's withdrawal plans
London stocks edged higher on Tuesday on Tuesday, as investors digested the Prime Minister's offer to MPs of a possible second referendum on Brexit, subject to Parliament's approval, but only if they first backed her own proposed withdrawal bill.
A second vote was not assured, but otherwise those opposed to a hard Bexit would have to risk her successor making a push for leaving without a deal.
The FTSE 100 was up 0.25% to 7,328.92, while the pound was 0.04% higher against the US dollar at 1.2731 and by just 0.11% against the euro to 1.1406, having hit an intraday high of 1.1461 just after Therese May began to speak.
"May knows that this is likely to be her final attempt to get a deal across the line, and with Brexiteers jostling for her position, there will be many who know that the Brexit process could well shift radically towards a harder form of Brexit if she loses," said IG's Josh Mahony.
"Thus the reaction of the pound in the wake of today's speech will likely reflect the perception of whether the deal could possibly grab enough Labour votes as much as the Tories."
More broadly, investors were cheering news that the Trump administration has issued a licence allowing US companies to keep doing business with Huawei over the next three months.
Spreadex analyst Connor Campbell said: "The reason behind this is likely some trademark lack of forethought from the Trump administration, the government failing to anticipate the effect the blacklisting would have on the US side of things. However, it also is a bit of fire control for the bridge currently burning between the two nations, keeping the relationship alive ahead of next month’s G20 meeting in Japan."
Investors were choosing to focus on the positives, brushing off the latest warning from the Organisation for Economic Co-operation and Development, which cut its global growth forecast and urged governments to resolve their trade disputes.
Market participants were also mulling the latest survey from the Confederation of British Industry, which showed the total orders balance in the manufacturing sector fell to -10 in May from -5 in April, missing expectations for no change and marking the lowest level since October 2016.
In equity markets, government contractor Galliford Try surged as the construction group said it was cutting 350 jobs at its construction division following a strategic review.
In a trading statement, Galliford said it expected full year results to be in line with its own forecasts, adding that target construction revenues would fall to £1.3bn. The company forecast profit before tax after exceptional items for the year to June 30 of £112.7m - £123.3m based on forecasts at May 20.
UDG Healthcare was on the rise as it announced two acquisitions and lifted its 2019 adjusted earnings per share guidance.
Electrocomponents rallied as it posted a 23.9% jump in full-year profit thanks to "strong" market share gains in EMEA and the Americas.
Severn Trent rose as it reported a 6.8% increase in annual profit but warned over the impact of nationalisation of the industry.
On the downside, Paddy Power Betfair was the biggest faller on the top-flight index throughout much of the day as Goldman Sachs said the company's US opportunity was "significant but priced in" and stuck with a 'neutral' rating.
Entertainment One retreated as the Peppa Pig owner said full-year pre-tax profit slumped 43% to £36.8m as it was hit by a one-off charge related to its home entertainment business.
WH Smith reversed early losses to trade higher after it announced the departure of chief executive officer Stephen Clarke and reported a 15% rise in third-quarter group sales.
FTSE 100 - Risers
Sainsbury (J) (SBRY) 207.10p 4.70%
Coca-Cola HBC AG (CDI) (CCH) 2,769.00p 3.63%
Persimmon (PSN) 2,108.00p 3.03%
Taylor Wimpey (TW.) 175.85p 2.54%
Evraz (EVR) 588.20p 2.36%
Antofagasta (ANTO) 846.20p 2.07%
Marks & Spencer Group (MKS) 272.90p 2.07%
Standard Life Aberdeen (SLA) 265.00p 2.04%
Micro Focus International (MCRO) 1,943.40p 2.02%
Just Eat (JE.) 633.20p 2.00%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 918.00p -2.46%
Imperial Brands (IMB) 2,143.50p -2.01%
Pearson (PSON) 785.20p -1.92%
International Consolidated Airlines Group SA (CDI) (IAG) 493.20p -1.83%
Paddy Power Betfair (PPB) 5,756.00p -1.00%
Hikma Pharmaceuticals (HIK) 1,691.00p -0.94%
Bunzl (BNZL) 2,088.00p -0.90%
Rio Tinto (RIO) 4,637.00p -0.84%
Unilever (ULVR) 4,751.00p -0.76%
ITV (ITV) 111.70p -0.76%
FTSE 250 - Risers
Galliford Try (GFRD) 619.00p 15.38%
Saga (SAGA) 53.25p 8.41%
Electrocomponents (ECM) 654.20p 7.85%
Metro Bank (MTRO) 705.50p 7.55%
Homeserve (HSV) 1,167.00p 6.87%
UDG Healthcare Public Limited Company (UDG) 700.00p 6.79%
Acacia Mining (ACA) 159.50p 5.63%
Sophos Group (SOPH) 404.90p 4.90%
Bank of Georgia Group (BGEO) 1,723.00p 4.81%
Funding Circle Holdings (FCH) 255.16p 3.43%
FTSE 250 - Fallers
Entertainment One Limited (ETO) 410.00p -10.95%
Royal Mail (RMG) 211.40p -9.23%
Wizz Air Holdings (WIZZ) 3,165.00p -4.44%
Sirius Minerals (SXX) 15.30p -3.77%
Merlin Entertainments (MERL) 337.60p -3.54%
Ted Baker (TED) 1,443.00p -3.22%
Vivo Energy (VVO) 113.60p -3.07%
Greencore Group (GNC) 216.00p -2.96%
Genus (GNS) 2,678.00p -2.92%
Meggitt (MGGT) 508.40p -2.87%