London midday: Stocks fall as pound rebounds on Brexit news

London stocks declined as the pound rebounded following news Prime Minister Theresa May offered to give MPs some scrutiny in the formal Brexit negotiations.

The FTSE 100 fell 0.31% to 7,049.03 points while the pound rose 1.16% to $1.2264.

Sterling regained ground after May caved into pressure to allow Tory MPs to vote for a Labour motion calling for greater scrutiny of her proposals in Britain’s exit from the European Union. However, she ruled out letting parliament vote on whether to trigger Article 50, the formal Brexit procedure.

May has said she will invoke Article 50 by the end of March.

“While the pound was arguably due a correction of some kind, we’re probably just seeing a little profit taking at the moment, triggered by Theresa May’s acceptance that Parliament should be allowed to vote on Brexit deal, something that’s seen as reducing the chance of a hard Brexit being imposed on the UK,” said Oanda’s Craig Erlam.

“That said, the concession was accompanied by a warning that it shouldn’t attempt to block or undermine the negotiating position of the government, with May determined to remain in full control of the talks. The gains are small in comparison to the losses incurred by the pound recently so I don’t think these comments have greatly altered people’s outlook for sterling.”

Meanwhile, investors were looking ahead to the Federal Reserve’s minutes on its 20-21 September meeting when policymakers decided against an interest rate hike increase but said they expected at least one hike by the end of the year. The market will be closely scrutinising the minutes for clues on the timing on the next rate rise. The minutes will be published at 1900 BST.

On the company front, miner Fresnillo slipped back after a quarterly production report, while Domino’s Pizza also nudged lower despite saying it continued to trade well in the third quarter and reporting an 11.5% jump in system sales.

Shares in Premier Foods tumbled after it warned that first-half trading profit was likely to be slightly below the previous year and posted a drop in second-quarter sales due to warmer weather.

On the upside, property, residential, construction and services company Kier Group rose after saying it has completed the disposal of Mouchel Consulting to WSP Global for a total consideration of £75m.

Countryside Properties was also on the front foot. The private and public partnerships housebuilder said its rate of sales completions slowed but remained robust in the fourth quarter, while its order book swelled to a record size as it eyed major potential to work in partnership with local authorities and housing associations.

International Airlines Group and EasyJet rallied on the rebound in the pound and after a rescue plan for Monarch was agreed with its biggest shareholder.

Market Movers

FTSE 100 (UKX) 7,049.03 -0.31%
FTSE 250 (MCX) 18,034.52 -0.21%
techMARK (TASX) 3,555.39 -0.46%

FTSE 100 - Risers

Glencore (GLEN) 227.80p 2.66%
Capita (CPI) 599.00p 2.57%
Standard Life (SL.) 350.90p 1.45%
Direct Line Insurance Group (DLG) 355.70p 1.34%
easyJet (EZJ) 912.00p 1.28%
Centrica (CNA) 214.80p 1.23%
Hargreaves Lansdown (HL.) 1,275.00p 1.19%
Prudential (PRU) 1,453.50p 1.08%
Legal & General Group (LGEN) 216.70p 0.93%
International Consolidated Airlines Group SA (CDI) (IAG) 379.40p 0.88%

FTSE 100 - Fallers

Whitbread (WTB) 3,797.00p -2.32%
Lloyds Banking Group (LLOY) 52.75p -1.66%
Informa (INF) 654.00p -1.65%
Old Mutual (OML) 194.60p -1.57%
Smiths Group (SMIN) 1,489.00p -1.39%
TUI AG Reg Shs (DI) (TUI) 1,068.00p -1.29%
Rolls-Royce Holdings (RR.) 764.50p -1.29%
Smith & Nephew (SN.) 1,228.00p -1.29%
Carnival (CCL) 3,770.00p -1.23%
Mediclinic International (MDC) 887.50p -1.22%

FTSE 250 - Risers

Pagegroup (PAGE) 387.00p 5.19%
Tullow Oil (TLW) 277.60p 3.01%
Bodycote (BOY) 638.50p 2.90%
Electrocomponents (ECM) 374.00p 2.75%
Morgan Advanced Materials (MGAM) 302.00p 2.69%
Hunting (HTG) 561.50p 2.65%
Countryside Properties (CSP) 235.30p 1.95%
International Personal Finance (IPF) 280.10p 1.85%
DFS Furniture (DFS) 258.30p 1.77%
Riverstone Energy Limited (RSE) 1,223.00p 1.75%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 353.60p -5.12%
Sports Direct International (SPD) 283.30p -3.48%
Countrywide (CWD) 201.10p -3.13%
Brown (N.) Group (BWNG) 199.40p -2.73%
Workspace Group (WKP) 646.00p -2.49%
Mitchells & Butlers (MAB) 269.50p -2.32%
Sophos Group (SOPH) 254.00p -2.27%
Greencore Group (GNC) 297.50p -2.23%
Restaurant Group (RTN) 354.00p -2.18%
Woodford Patient Capital Trust (WPCT) 94.40p -1.97%