London midday: FTSE falls as pound rises on Brexit ruling, BoE policy

The FTSE 100 fell on Thursday as the pound strengthened after the UK High Court ruled that Parliament must vote on whether the government can start the formal Brexit process.

The pound rose 1.32% to the dollar at $1.2466 as the High Court on Thursday said the government will not be allowed to invoke Article 50, which starts the process of leaving the EU, without a vote in Parliament.

The government said it was "disappointed" by the ruling and will appeal the decision to the Supreme Court for a hearing expected on 7 December.

Prime Minister Theresa May has previously said she will trigger Article 50 by the end of March 2017.

Neil Wilson, market analyst at ETX Capital, said: "Even if Article 50 is triggered as planned, this judgment could underpin sterling for some time and assuage fears about a ‘hard Brexit’ if the pro-EU camps in Parliament start to dictate terms to the government in return for voting with the people.

“We could see this create a floor under the pound around $1.25.”

The pound was also lifted by the Bank of England’s decision keep interest rates unchanged, as expected by economists. The BoE voted unanimously to leave interest rates at 0.25%. The attention now turns to the Inflation Report press release at 1230 GMT.

In other UK news, the Markit/CIPS UK services purchasing managers' index rose to 54.5 from 52.6 the month before, which was ahead of the consensus estimate of 52.4 and the fastest expansion since January. A reading above 50 indicates an expansion in sector activity.

Weakness in the pound since the Brexit vote has driven a "marked intensification of cost pressures" among services companies, Markit said, with input price inflation surging to the highest since March 2011 and with the month-on-month acceleration a record since the survey began 20 years ago.

Elsewhere, Chinese service activity growth accelerated in October at the fastest pace in four months. The Caixin services PMI rose to 52.4 last month from 52.0 in September.

The eurozone unemployment rate was steady in September at its lowest level in more than five years, according to the latest figures from Eurostat, in line with analysts’ expectations. The unemployment rate came in at 10%, unchanged from a downwardly-revised 10% the month before, and down from 10.6% in September last year. Eurostat’s previous estimate for August was 10.1%.

Still to come, US initial jobless claims at 1230 GMT, US services PMI at 1345 GMT, ISM non-manufacturing index at 1400 GMT and US factory and durable goods orders at 1400 GMT.

In corporate news, Wm Morrison Supermarkets edged higher after reporting its fourth consecutive quarter of growth, helped by its biggest ever Halloween.

Asset manager Schroders also nudged up as it said third-quarter assets under management rose 9.1%.

On the downside, specialty chemical company Croda International slipped despite posting an increase in third-quarter sales.

Randgold Resources was on the back foot despite noting a 55% surge in third-quarter profit.

Glencore also retreated as it said production in most of its commodities declined in the third quarter.

Market Movers

FTSE 100 (UKX) 6,834.90 -0.15%
FTSE 250 (MCX) 17,745.39 1.61%
techMARK (TASX) 3,328.26 0.28%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 192.80p 5.53%
Dixons Carphone (DC.) 343.00p 5.09%
Marks & Spencer Group (MKS) 354.20p 4.08%
British Land Company (BLND) 607.50p 3.85%
Sainsbury (J) (SBRY) 261.90p 3.56%
easyJet (EZJ) 999.00p 3.20%
Lloyds Banking Group (LLOY) 56.90p 3.17%
Whitbread (WTB) 3,692.00p 3.07%
Land Securities Group (LAND) 1,013.00p 3.05%
Legal & General Group (LGEN) 213.70p 2.94%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 7,100.00p -6.39%
Fresnillo (FRES) 1,700.00p -4.49%
Anglo American (AAL) 1,096.50p -3.01%
Pearson (PSON) 729.50p -2.93%
Polymetal International (POLY) 924.50p -2.63%
Relx plc (REL) 1,394.00p -2.59%
GlaxoSmithKline (GSK) 1,566.50p -2.49%
Croda International (CRDA) 3,384.00p -2.22%
Diageo (DGE) 2,088.50p -2.06%
Antofagasta (ANTO) 539.50p -1.91%

FTSE 250 - Risers

Shawbrook Group (SHAW) 236.50p 11.93%
Inmarsat (ISAT) 802.50p 9.93%
International Personal Finance (IPF) 315.10p 7.95%
Lancashire Holdings Limited (LRE) 760.00p 7.19%
Daejan Holdings (DJAN) 5,790.00p 6.34%
Capital & Counties Properties (CAPC) 296.50p 6.16%
Pets at Home Group (PETS) 224.90p 5.89%
AO World (AO.) 169.00p 5.43%
Ascential (ASCL) 305.40p 5.35%
Aldermore Group (ALD) 176.50p 5.25%

FTSE 250 - Fallers

esure Group (ESUR) 195.60p -26.41%
Howden Joinery Group (HWDN) 362.80p -5.00%
Playtech (PTEC) 877.50p -4.72%
Acacia Mining (ACA) 532.00p -3.18%
Evraz (EVR) 198.00p -2.94%
Hochschild Mining (HOC) 267.10p -1.69%
Monks Inv Trust (MNKS) 524.50p -1.41%
NMC Health (NMC) 1,454.00p -1.29%
Scottish Mortgage Inv Trust (SMT) 324.40p -1.28%
P2P Global Investments (P2P) 800.00p -0.99%