London midday: FTSE rises as pound falls on Brexit uncertainty

The FTSE 100 gained on Tuesday as members of parliament begin a two-day debate on whether to trigger Article 50, which kicks off the formal process of Brexit.

The London benchmark rose 0.57% to 7,159.16 points by 1208 GMT. The pound fell 0.45% against the dollar to $1.2430 and dropped 0.54% versus the euro to €1.1610 as investors awaited the outcome of MPs debate on passing the Brexit bill.

Prime Minster Theresa May hopes to rush through the Brexit bill by 7 March in order to meet the self-imposed deadline for invoking Article 50 by the end of the month. The leader reportedly wants to trigger Article 50 on 9 March.

“It is quite surprising that Theresa May is reportedly aiming to pull the trigger on Article 50 earlier in March rather than later in the month, especially considering the continuous uncertainty over the strategy to exit the European Union,” said analyst Jameel Ahmad at FXTM.

Meanwhile, traders continued to digest US President Donald Trump’s latest policies, including his temporary travel ban which prevents nationals from seven Muslim-majority countries from entering the US.

Overnight Trump fired acting US attorney general Sally Yates after she questioned the legality of his immigration ban.

“Despite the obvious moral impact the travel ban has had, the impact to the majority of businesses is likely to be minimal, providing a great buying opportunity,” said Joshua Mahony, market analyst at IG.

“The response to Trump’s ban has been a classic risk-off move, with the likes of Treasuries, gold and the yen gaining ground at the detriment of the dollar and riskier assets.”

In economic data, UK consumer confidence improved in January but was still in negative territory on worries about Brexit and a weaker pound. GfK’s consumer confidence index increased two points to -5 this month, beating expectations of -7, supported by a more positive outlook on personal finances.

Barclays Research analysts said despite the marginal increase in January, the headline consumer confidence index is one point below its one-year average. The bank also said the “slight positivity” is likely to be short-lived in light of Brexit, rising inflation and Trump’s controversial policies.

Separately, a report showed UK business confidence fell in January. The Lloyds business barometer dropped 10 points to 29% in January, the lowest level in four months, as economic optimism declined.

Elsewhere, the eurozone unemployment rate fell to 9.6% in December 2016 from a downwardly-revised 9.7% in November and 10.5% in December 2015. This is the lowest rate recorded in the bloc since May 2009 and came in ahead of analysts’ expectations for a reading of 9.8%.

Gross domestic product in the eurozone rose 1.8% year-on-year in the fourth quarter, unchanged from the third quarter’s growth and beating expectations of 1.7%. Compared to the previous three-month period, GDP edged up 0.5% following a 0.4% quarter-on-quarter rise in the third quarter. Economists had expected a 0.4% quarterly increase.

Eurozone inflation grew 1.8% year-on-year in January, up from 1.1% the previous month, exceeding estimates of 1.5%.

In corporate news, mining stocks rallied as metal prices jumped. BHP Billiton, Anglo American and Antofagasta were among the top risers.

Ocado’s shares advanced as it reported a rise in full-year core earnings and revenue.

Britvic was also on the front foot as it reported growth in first-quarter revenue and said it was confident it will meet market expectations for the full year.

CYBG slumped as reported a drop in core SME lending and unsecured personal loans in the first quarter.

Market Movers

FTSE 100 (UKX) 7,156.03 0.53%
FTSE 250 (MCX) 18,157.90 0.42%
techMARK (TASX) 3,234.21 0.06%

FTSE 100 - Risers

BHP Billiton (BLT) 1,453.50p 2.68%
Old Mutual (OML) 211.00p 2.48%
Anglo American (AAL) 1,364.50p 2.36%
Antofagasta (ANTO) 831.50p 2.15%
Standard Chartered (STAN) 785.30p 2.09%
Sage Group (SGE) 619.00p 2.06%
Burberry Group (BRBY) 1,658.00p 1.97%
Rolls-Royce Holdings (RR.) 672.00p 1.82%
Bunzl (BNZL) 2,102.00p 1.74%
Smurfit Kappa Group (SKG) 2,107.00p 1.74%

FTSE 100 - Fallers

AstraZeneca (AZN) 4,203.00p -1.35%
Associated British Foods (ABF) 2,402.00p -1.19%
Legal & General Group (LGEN) 237.00p -1.17%
Tesco (TSCO) 195.70p -1.06%
Vodafone Group (VOD) 194.10p -0.94%
Capita (CPI) 502.00p -0.79%
Marks & Spencer Group (MKS) 337.60p -0.68%
Croda International (CRDA) 3,377.00p -0.62%
Admiral Group (ADM) 1,787.00p -0.56%
Hikma Pharmaceuticals (HIK) 1,805.00p -0.55%

FTSE 250 - Risers

Ocado Group (OCDO) 268.10p 9.70%
Nostrum Oil & Gas (NOG) 470.10p 6.05%
Greencore Group (GNC) 230.90p 5.77%
Shawbrook Group (SHAW) 256.70p 4.95%
Britvic (BVIC) 617.50p 4.84%
Kaz Minerals (KAZ) 456.40p 4.42%
G4S (GFS) 260.90p 3.74%
Vesuvius (VSVS) 478.20p 3.35%
Intermediate Capital Group (ICP) 704.00p 2.55%
Auto Trader Group (AUTO) 400.40p 2.54%

FTSE 250 - Fallers

CYBG (CYBG) 273.10p -4.04%
IG Group Holdings (IGG) 529.00p -3.29%
Keller Group (KLR) 798.00p -2.68%
IP Group (IPO) 190.00p -2.56%
TalkTalk Telecom Group (TALK) 154.10p -2.47%
Fidessa Group (FDSA) 2,286.00p -2.43%
Mitie Group (MTO) 196.90p -2.09%
Evraz (EVR) 216.80p -1.68%
Supergroup (SGP) 1,489.00p -1.52%
Dechra Pharmaceuticals (DPH) 1,444.00p -1.43%