London close: Investors play it safe ahead of vote in Parliament

London stocks retreated on Monday following the release of disappointing Chinese trade data and as investors eyed Tuesday's Commons vote on Theresa May's Brexit deal.

The FTSE 100 fell 0.91% or 63.16 points to 6,855.02, while the pound was up 0.31% against the US dollar to 1.28850 and by 0.29% to 1.1228 versus the euro.

Indeed, Sterling hit its highest level against the greenback in seven weeks as May warned in a speech at a factory in Stoke-on-Trent that Brexit may be scrapped if MPs vote against her deal, but also said she had secured valuable assurances from the EU.

"However, the markets remain highly skeptical as to whether May can get the required support in the Commons tomorrow evening and a heavy defeat would likely see her deal dead in the water," said David Cheetham, chief market analyst at XTB.

According to press reports over the weekend, MPs from the Conservatives, Labour, Liberal Democrats and the SNP have drawn up legislation that would deliver a final say on Brexit. The two bills, to establish the legal framework for a referendum and decide what is on the ballot paper, could be put forward as early as Wednesday.

Meanwhile, Labour leader Jeremy Corbyn pledged that he will push for a general election "soon" afterwards, if May's Brexit deal is voted down.

Ahead of the Commons vote on Tuesday, European Commission President Jean-Clause Juncker and EU Council President Donald Tusk wrote a letter to May with a series of assurances, one of which is confirmation that the Irish backstop would only be temporary.

Sentiment in financial markets was undermined by data released earlier, which showed that imports in China fell 7.6% on the year in December, while exports were down 4.4%, versus expectations for 3% and 5.4% increases, respectively. The figures also showed that China's trade surplus with the US hit a record high last year.

Joshua Mahony, senior market analyst at IG said: "A sharp deterioration in both export and imports highlights the kickback following a period of front-loading of Chinese exports, which have now fallen the most in two-years. Softness for US firms reliant upon Chinese demand will likely continue as we see the impact that this trade war has had upon spending habits in the world’s second-largest country.

"Unfortunately for US-China trade talks, today has seen the Chinese trade surplus with the US grow to the largest since records began in 2006. Trump’s notion that a trade war would hurt China more than the US appears not to be playing out as of yet, with the yuan devaluation helping to shift the landscape in favour of China."

On the corporate front, Paddy Power was knocked lower by a downgrade to 'equalweight' at Barclays, Next was hit by a downgrade to 'underperform' at Credit Suisse and Countryside Properties was weaker after JPMorgan cut the stock to 'underweight'.

Recruiter PageGroup was sharply lower as it posted record profit for the fourth quarter, but only modest growth in the UK and a slowdown in China. Shares in fellow recruiter Hays also fell.

Premier Oil tumbled after confirming its interest in Chevron assets following press reports that it was looking to drum up cash for some major asset acquisitions.

On the upside, JD Sports Fashion surged to the top of the FTSE 250 as it said sales growth picked pace over Christmas, with the retailer also encouraged by the performance in the US as it integrates its Finish Line acquisition. Total like-for-like sales growth in the Sports Fashion for the 48 weeks to 5 January topped 5%, up from 4% in the first half of the year, while gross profit margins were maintained at prior year levels.

LSE shares racked up strong gains as Berenberg highlighted the company's strong cash generation and robust capital structure and said it was well placed to exploit two of the most robust structural trends in the finance industry: increased clearing of derivatives and greater use of quantitative investment techniques.

Burberry was boosted by an upgrade to 'neutral' at Bank of America Merrill Lynch.

Market Movers

FTSE 100 (UKX) 6,855.02 -0.91%
FTSE 250 (MCX) 18,417.58 -0.67%
techMARK (TASX) 3,334.52 -1.72%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 232.50p 3.01%
Land Securities Group (LAND) 850.40p 2.06%
Ocado Group (OCDO) 878.00p 1.95%
London Stock Exchange Group (LSE) 4,390.00p 1.55%
Lloyds Banking Group (LLOY) 55.54p 1.52%
Barclays (BARC) 159.12p 1.21%
Persimmon (PSN) 2,229.00p 1.18%
easyJet (EZJ) 1,178.00p 1.12%
Smurfit Kappa Group (SKG) 2,164.00p 1.03%
British Land Company (BLND) 549.40p 0.88%

FTSE 100 - Fallers

Paddy Power Betfair (PPB) 6,260.00p -4.13%
AstraZeneca (AZN) 5,509.00p -3.55%
Pearson (PSON) 991.60p -3.49%
GVC Holdings (GVC) 695.00p -3.41%
Wood Group (John) (WG.) 571.00p -2.89%
Sage Group (SGE) 592.60p -2.63%
Antofagasta (ANTO) 813.80p -2.61%
Intertek Group (ITRK) 4,903.00p -2.44%
Vodafone Group (VOD) 149.20p -2.38%
Next (NXT) 4,649.00p -2.27%

FTSE 250 - Risers

JD Sports Fashion (JD.) 421.40p 6.36%
Stobart Group Ltd. (STOB) 168.80p 5.47%
Just Group (JUST) 99.80p 4.45%
Rank Group (RNK) 154.20p 3.77%
Intu Properties (INTU) 113.00p 2.96%
Dechra Pharmaceuticals (DPH) 2,342.00p 2.63%
CYBG (CYBG) 188.40p 2.45%
Spirent Communications (SPT) 125.20p 2.29%
Halfords Group (HFD) 218.60p 2.15%
EI Group (EIG) 203.50p 2.06%

FTSE 250 - Fallers

Premier Oil (PMO) 70.25p -11.58%
Pagegroup (PAGE) 432.20p -7.05%
Sanne Group (SNN) 532.00p -5.64%
Computacenter (CCC) 1,016.00p -5.05%
Hays (HAS) 141.60p -3.80%
Countryside Properties (CSP) 318.20p -3.58%
Hikma Pharmaceuticals (HIK) 1,539.00p -3.48%
Genus (GNS) 2,250.00p -3.43%
Cairn Energy (CNE) 176.60p -3.13%
Babcock International Group (BAB) 525.20p -3.03%