London open: Stocks edge up as sterling dips ahead of indicative votes
London stocks rose in early trade on Wednesday, taking their cue from an upbeat session on Wall Street as sterling slipped ahead of the indicative votes due to take place in Westminster later in the day.
At 0830 GMT, the FTSE 100 was up 0.3% at 7,221.03, while the pound was down 0.1% against the dollar and the euro at 1.3204 and 1.1715, respectively.
Overnight, Brexiter Boris Johnson joined European Research Group chair Jacob Rees-Mogg in indicating that he would back Theresa May's Brexit deal.
While MPs will take control of the House of Commons for a series of indicative votes on Wednesday afternoon, the Prime Minister was reportedly preparing to bring her Brexit deal for a third vote by the end of the week, if she was able to get Northern Ireland's DUP to support it. However, the DUP had said only a day earlier that it favoured a long delay over May's withdrawal agreement.
Neil Wilson, chief market analyst at Markets.com, questioned whether the indicative votes would matter as they are not binding on the government and it seems unlikely there will be a majority in parliament for anything.
"Time is running out though and without parliament coalescing around a majority view, the default is still no-deal," he said. "For sterling, there is precious little to drive directional trading. GBPUSD seems to be finding support around the 1.3180 region, roughly in line with the 50% retracement of the 2016-2018 trough-to-peak rally."
Debating will begin in the Commons from around 1400 GMT, with voting expected to start at around 1900 GMT and finish before 2200 GMT.
In equity markets, Ocado was still sitting pretty at the top of the FTSE 100 a day after announcing a new agreement with Australian grocer Coles.
Plumbing and heating products distributor Ferguson was on the rise after suffering heavy losses on Tuesday on the back of half-year results, as JPMorgan upgraded its stance on the stock to 'overweight'.
Debenhams surged nearly 60% after Sports Direct boss Mike Ashley proposed a possible 5p-per-share takeover offer for the department store group as long as it immediately appoints him as its chief executive and cancels its current refinancing plans. Sports Direct shares were up a more modest 2.5%.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The potential 5p offer would be a generous one for shareholders, but it comes with strings attached for Debenhams, in particular appointing Mike Ashley as CEO, and desisting from current plans to refinance the company.
"The Debenhams board are bound by their duty to shareholders to give this proposal proper consideration, though it’s not as yet a firm offer for the company. There’s a bit of a chicken and egg situation here too. If Debenhams appoints Mike Ashley as CEO, then there’s little to bind Sports Direct to making a firm offer.
"This is not conventional corporate behaviour by any means, but that’s what we’ve come to expect from the Sports Direct CEO. What we haven’t had from either Mike Ashley or Debenhams is a strategic plan for the long term future of the company, and today that still remains sadly lacking."
Housebuilder Bellway nudged higher after it reported a rise in interim revenue and profit and hiked its dividend as demand was propped up by the government's Help to Buy scheme and affordable mortgage finance.
On the downside, cigarette maker Imperial Brands was a little weaker as it said in an update ahead of its first-half results that group net revenue growth was looking like being at or above the upper end of its 1-4% revenue growth range and EPS growth within its 4-8% guidance range.
Cybersecurity provider Avast was under the cosh after Sybil Holdings placed 95.4m shares in the company at 284p each, not long after it emerged that the chief executive plans to step down.
Market Movers
FTSE 100 (UKX) 7,221.03 0.34%
FTSE 250 (MCX) 18,961.18 0.34%
techMARK (TASX) 3,500.95 0.33%
FTSE 100 - Risers
Ocado Group (OCDO) 1,326.00p 1.45%
Rolls-Royce Holdings (RR.) 902.60p 1.23%
Ashtead Group (AHT) 1,825.64p 1.12%
BT Group (BT.A) 225.05p 1.06%
Burberry Group (BRBY) 1,897.00p 1.04%
Rio Tinto (RIO) 4,357.00p 1.03%
Ferguson (FERG) 4,849.00p 1.02%
Smith (DS) (SMDS) 328.35p 0.91%
Bunzl (BNZL) 2,456.00p 0.86%
Fresnillo (FRES) 879.40p 0.85%
FTSE 100 - Fallers
Severn Trent (SVT) 2,025.00p -0.88%
Pearson (PSON) 825.00p -0.87%
Carnival (CCL) 3,786.00p -0.37%
Berkeley Group Holdings (The) (BKG) 3,771.00p -0.26%
Direct Line Insurance Group (DLG) 350.90p -0.17%
Sage Group (SGE) 687.80p -0.15%
British Land Company (BLND) 593.11p -0.12%
AstraZeneca (AZN) 6,406.00p -0.09%
Diageo (DGE) 3,127.50p -0.08%
Admiral Group (ADM) 2,137.00p -0.05%
FTSE 250 - Risers
Morgan Advanced Materials (MGAM) 246.40p 2.92%
Sports Direct International (SPD) 294.50p 2.51%
Aston Martin Lagonda Global Holdings (AML) 1,051.70p 2.48%
McCarthy & Stone (MCS) 131.20p 2.42%
Stobart Group Ltd. (STOB) 162.96p 2.36%
Ascential (ASCL) 344.26p 2.09%
Pets at Home Group (PETS) 158.70p 1.99%
Ted Baker (TED) 1,602.96p 1.97%
Entertainment One Limited (ETO) 430.00p 1.90%
Just Group (JUST) 65.40p 1.87%
FTSE 250 - Fallers
Avast (AVST) 277.30p -6.57%
Contour Global (GLO) 169.47p -3.16%
PZ Cussons (PZC) 195.30p -2.01%
Hochschild Mining (HOC) 201.60p -1.61%
Euromoney Institutional Investor (ERM) 1,152.00p -0.86%
Britvic (BVIC) 924.00p -0.65%
St. Modwen Properties (SMP) 398.19p -0.55%
Softcat (SCT) 805.00p -0.49%
HICL Infrastructure Company Ltd (HICL) 157.37p -0.46%
Wetherspoon (J.D.) (JDW) 1,299.00p -0.46%