London midday: Stocks pare gains as jitters creep in ahead of Brexit vote
As the vote on Theresa May's Brexit deal loomed, it was unsurprising to see stocks in London come off their highs by midday on Tuesday, as jitters about the UK's divorce from the EU offset relief over China's latest stimulus measures.
The FTSE 100 was up 0.2% at 6,869.22, while the pound was down 0.1% against the dollar at 1.2848 and 0.2% firmer versus the euro at 1.1242.
Stocks had kicked the session off firmly in the green as investors welcomed China's plans to cut taxes on a larger scale to help support its slowing economy, boost spending and provide financing for private and small businesses.
However, most of the gains soon evaporated as the focus shifted to the Commons vote on May's Brexit plan, which is expected to result in a heavy defeat after the Prime Minister failed to shift the EU's position on the Irish backstop.
Oanda analyst said the key determinant in how financial markets will respond will be the margin of May's defeat.
"I think it's safe to say that a shock victory for May and her deal would be very positive for the pound, both because of the softer Brexit it would ensure and the uncertainty and risk of no deal Brexit that would be removed. The chances of that happening appear very slim though today.
"Ultimately, defeat today doesn't really matter and doesn't kill May's deal. Rather, it’s a box ticking process that puts in motion other options being considered, including a no confidence vote and second referendum. Only once these options have been exhausted will we get a real idea of whether May's deal will pass, but that will take time, which could mean an extension to exit date."
Mining stocks were still on the front foot on the back of the China news, although gains were less pronounced than they had been earlier in the day.
Elsewhere, Spirent Communications surged as the communications technology company said it expects to deliver a 30% year-on-year rise in adjusted operating profit to between $75m and $77m, exceeding market expectations.
Recruiter Hays rallied as it reported 8% growth in second-quarter net fees.
On the downside, GVC Holdings, Paddy Power and 888 were all weaker after the US Department of Justice called for wider restrictions on all online gambling.
Persimmon ticked down as the housebuilder said it expected 2018 pre-tax profits to be modestly ahead of current market consensus, having benefited from new developments opened through the year.
Emerging-markets focused asset manager Ashmore was on the back foot as it said growth in assets under management slowed in the second quarter, as positive net inflows were counterbalanced by negative investment performance.
Provident Financial was the worst performer on the FTSE 250 as it warned that full-year profits would be towards the lower end of market expectations due to "modestly higher than expected" impairments.
In broker note action, Weir was upgraded to 'buy' at Societe Generale, while Cairn Energy was cut to 'equalweight' at Morgan Stanley and Faroe Petroleum was downgraded to 'hold' at Jefferies.
IMI was downgraded to 'hold' at SocGen, while Sanne Group was initiated at 'overweight' by JPMorgan.
Market Movers
FTSE 100 (UKX) 6,869.22 0.21%
FTSE 250 (MCX) 18,437.42 0.11%
techMARK (TASX) 3,350.50 0.48%
FTSE 100 - Risers
Ocado Group (OCDO) 894.40p 1.87%
Rolls-Royce Holdings (RR.) 877.34p 1.61%
Admiral Group (ADM) 2,060.00p 1.58%
3i Group (III) 826.80p 1.45%
Land Securities Group (LAND) 862.20p 1.39%
Carnival (CCL) 4,090.00p 1.36%
Smurfit Kappa Group (SKG) 2,192.00p 1.29%
BAE Systems (BA.) 502.80p 1.25%
Ferguson (FERG) 5,305.00p 1.18%
Mondi (MNDI) 1,792.00p 1.13%
FTSE 100 - Fallers
ITV (ITV) 133.50p -3.05%
GVC Holdings (GVC) 679.50p -2.23%
Pearson (PSON) 970.80p -2.10%
Fresnillo (FRES) 906.04p -1.92%
Royal Bank of Scotland Group (RBS) 228.30p -1.81%
Paddy Power Betfair (PPB) 6,150.00p -1.76%
Standard Life Aberdeen (SLA) 263.50p -1.59%
Burberry Group (BRBY) 1,732.50p -1.45%
International Consolidated Airlines Group SA (CDI) (IAG) 597.40p -1.16%
Coca-Cola HBC AG (CDI) (CCH) 2,491.00p -1.15%
FTSE 250 - Risers
Spirent Communications (SPT) 147.20p 17.57%
Halfords Group (HFD) 228.80p 4.67%
Funding Circle Holdings (FCH) 318.00p 3.48%
Ibstock (IBST) 233.00p 3.37%
Hays (HAS) 146.10p 3.18%
Dechra Pharmaceuticals (DPH) 2,412.00p 2.99%
Rathbone Brothers (RAT) 2,384.00p 2.85%
CLS Holdings (CLI) 235.00p 2.40%
Ultra Electronics Holdings (ULE) 1,403.99p 2.18%
Energean Oil & Gas (ENOG) 641.70p 2.07%
FTSE 250 - Fallers
Provident Financial (PFG) 529.00p -18.24%
888 Holdings (888) 165.60p -6.81%
Sanne Group (SNN) 513.00p -4.11%
Ascential (ASCL) 390.40p -3.46%
Amigo Holdings (AMGO) 261.75p -3.36%
Mediclinic International (MDC) 317.40p -2.94%
CYBG (CYBG) 183.00p -2.87%
Ashmore Group (ASHM) 369.00p -2.59%
Savills (SVS) 747.00p -2.29%
William Hill (WMH) 164.90p -2.17%