London open: Stocks rise, sterling slips as MPs fail to agree alternative Brexit plan
London stocks rose in early trade on Thursday, helped along by a weaker pound as investors digested overnight Brexit developments in Westminster.
At 0830 GMT, the FTSE 100 was up 0.5% to 7,228.53 as sterling fell 0.4% against the dollar and the euro to 1.3133 and 1.1689, respectively, after Prime Minister Theresa May agreed to quit if she gets backing for her Brexit deal, as MPs failed to reach a majority on any of the eight indicative votes in Parliament.
The two options with the most support in the House of Commons were a confirmatory second referendum, with 268 voting for and 295 against, and a plan for the government to negotiate a “permanent and comprehensive UK-wide customs union with the EU” that received 264 votes of support but 272 against.
Senior Berenberg analyst Kallum Pickering said that nonetheless, the indicative votes yielded a few clear insights apart, save that parliament is strongly against a no-deal hard Brexit, there is more support for a softer version of Brexit than May’s semi-soft deal and the option of a new referendum is "not off the table".
However, Neil Wilson, chief market analyst at Markets.com, suggested it might be time for traders to accept that the UK will leave the EU without a deal: "All last night’s charade of a vote did was confirm what we already knew; that there is no majority in parliament for anything. In the absence of real leadership, this makes reaching a workable consensus impossible.
"Nevertheless, there is yet the possibility that Theresa May gets enough support for her deal in an MV3. We have seen a number of Tory MPs come around to her deal, but with the DUP failing to budge it would require Labour support. For May, hoping Labour MPs will back her deal is like praying for unicorns."
Away from Brexit, market sentiment was given a boost by a Reuters report that the US and China have made progress in all areas of talks bar enforcement and intellectual property.
In equity markets, Imperial Brands and British American Tobacco were the standout gainers after upgrades to 'buy' at Citi.
Johnson Matthey was on the front foot 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.
SSE nudged higher despite saying it expects a "significant" reduction in 2018/19 adjusted operating profit in its wholesale business, as it continues to assess "all options" for its retail supply arm, SSE Energy Services, following the collapse of the merger with Npower last year.
On the downside, motor insurance underwriter, Sabre Insurance, was in the red 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.
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.
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.
Market Movers
FTSE 100 (UKX) 7,228.53 0.48%
FTSE 250 (MCX) 18,911.05 0.09%
techMARK (TASX) 3,500.71 0.29%
FTSE 100 - Risers
Imperial Brands (IMB) 2,618.00p 2.27%
British American Tobacco (BATS) 3,151.00p 1.97%
Johnson Matthey (JMAT) 3,169.00p 1.83%
Ocado Group (OCDO) 1,313.50p 1.74%
NMC Health (NMC) 2,230.00p 1.73%
Antofagasta (ANTO) 935.00p 1.26%
International Consolidated Airlines Group SA (CDI) (IAG) 520.80p 1.13%
Glencore (GLEN) 312.00p 1.07%
Rio Tinto (RIO) 4,379.00p 1.03%
DCC (DCC) 6,595.00p 1.00%
FTSE 100 - Fallers
Schroders (SDR) 2,643.00p -2.58%
easyJet (EZJ) 1,135.00p -1.90%
Prudential (PRU) 1,532.50p -1.79%
Carnival (CCL) 3,698.00p -0.88%
British Land Company (BLND) 591.20p -0.67%
Barratt Developments (BDEV) 607.20p -0.59%
National Grid (NG.) 879.30p -0.55%
Morrison (Wm) Supermarkets (MRW) 225.55p -0.49%
Barclays (BARC) 154.82p -0.46%
Royal Bank of Scotland Group (RBS) 250.30p -0.44%
FTSE 250 - Risers
Bakkavor Group (BAKK) 120.00p 4.35%
Clarkson (CKN) 2,369.90p 2.82%
Sirius Minerals (SXX) 20.28p 1.40%
Big Yellow Group (BYG) 996.50p 1.27%
JD Sports Fashion (JD.) 485.40p 1.12%
Card Factory (CARD) 180.60p 1.12%
CYBG (CYBG) 199.20p 1.07%
Convatec Group (CTEC) 140.75p 1.04%
Murray International Trust (MYI) 1,168.00p 1.04%
JPMorgan Emerging Markets Inv Trust (JMG) 886.90p 1.01%
FTSE 250 - Fallers
888 Holdings (888) 157.99p -3.84%
Bovis Homes Group (BVS) 1,067.00p -3.53%
Brewin Dolphin Holdings (BRW) 303.00p -2.76%
Ted Baker (TED) 1,539.42p -2.51%
Rank Group (RNK) 153.20p -2.42%
Babcock International Group (BAB) 484.70p -2.36%
Acacia Mining (ACA) 194.35p -2.16%
Metro Bank (MTRO) 800.00p -2.02%
Kier Group (KIE) 374.20p -1.84%
Rathbone Brothers (RAT) 2,200.00p -1.61%