London midday: Stocks push up ahead of Parliamentary votes; Hargreaves retreats

Equity markets in London had extended gains by midday on Tuesday, with defensive stocks on the rise as investors eyed the second parliamentary vote on Theresa May’s Brexit ‘Plan B’ and continued to keep an eye on US-China trade relations.

The FTSE 100 was up 1.3% at 6,831.31, while the pound was down 0.1% against the dollar at 1.3151 and 0.2% lower versus the euro at 1.1498 as MPs prepared to vote on a host of amendments that could help shape the future of Brexit negotiations.

Joshua Mahony, senior market analyst at IG, said: "We are yet to find out exactly which amendments will be put forward for the vote, yet there is likely to be a significant focus on the ability to avoid no-deal Brexit and a potential extension to article 50. While any such amendments would not be legally binding, today’s votes will provide Theresa May with an idea of what would and wouldn’t pass through Parliament.

"What Parliament hopes is that their outright rejection of Theresa May’s deal, coupled with a strong back of a specific route to finding a deal, the EU will cave in and allow some concessions. However, widespread hopes that the EU would eventually cede ground on the backstop have proven wrong so far, and thus this may be yet another costly dead end with just two months until the UK tumbles out of the EU."

Meanwhile, market participants were also looking ahead to the two days of Sino-US trade talks that kick off in Washington on Wednesday, after the US Justice Department threw a spanner in the works by filing a host of criminal charges against Chinese telecoms company Huawei and its chief financial officer, Meng Wanzhou. Huawei has denied any wrongdoing.

The US delegation will be led by Trade Representative Robert Lighthizer and will include Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross, President Trump's policy advisers Larry Kudlow and Peter Navarro. The Chinese delegation will be led by Vice Premier Liu He.

On the corporate front, British American Tobacco was the standout gainer on the FTSE 100 after an upgrade to ‘overweight’ from 'neutral' at Piper Jaffray, while Imperial Brands followed close behind.

Other defensives were in demand too, with the likes of GlaxoSmithKline and utilities National Grid and United Utilities trading higher.

Housebuilder Crest Nicholson racked up strong gains despite posting a 15% drop in full-year profit amid Brexit uncertainty as it also highlighted strong forward sales and lower costs.

Intermediate Capital Group rallied after a well-received third-quarter update, while UDG Healthcare and Greencore advanced following the release of their first-quarter statements.

Pensions and investment platform Hargreaves Lansdown was in the red, however, as it reported a 24% drop in net new business for the first half and a 6% decline in assets under administration.

Royal Mail tumbled to a new low as it warned "business uncertainty" is hitting letter volumes and said parcels volumes would take a hit as it defended profit margins. Management now expects to deliver adjusted group operating profit before transformation costs of £500-530m, from the £500-550m previously indicated.

Domino’s Pizza lost ground as it said full-year underlying pre-tax profit was expected to be at the lower end of the consensus range of £93.9m to £98.2m, while PZ Cussons tanked after saying that adjusted pre-tax profit for the year will be towards £70m, down from £80.1m the year before.

In broker note action, Electrocomponents was upgraded to ‘buy’ at Berenberg. Diploma and Halma were downgraded to ‘hold’ at Berenberg, while Polymetal was cut to ‘hold’ at VTB Capital.

Market Movers

FTSE 100 (UKX) 6,831.31 1.25%
FTSE 250 (MCX) 18,689.15 0.83%
techMARK (TASX) 3,345.65 1.13%

FTSE 100 - Risers

British American Tobacco (BATS) 2,478.50p 4.36%
Imperial Brands (IMB) 2,440.50p 3.35%
Smith (DS) (SMDS) 329.40p 3.29%
Sainsbury (J) (SBRY) 285.73p 2.41%
International Consolidated Airlines Group SA (CDI) (IAG) 637.40p 2.31%
GlaxoSmithKline (GSK) 1,469.00p 2.30%
Croda International (CRDA) 4,857.00p 2.23%
National Grid (NG.) 805.60p 2.12%
Fresnillo (FRES) 960.05p 1.98%
United Utilities Group (UU.) 813.34p 1.85%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,710.00p -4.84%
TUI AG Reg Shs (DI) (TUI) 1,170.50p -2.01%
easyJet (EZJ) 1,277.00p -1.24%
Standard Life Aberdeen (SLA) 258.40p -0.44%
Hiscox Limited (DI) (HSX) 1,436.00p -0.35%
Morrison (Wm) Supermarkets (MRW) 233.15p -0.15%
Prudential (PRU) 1,484.50p -0.10%
Paddy Power Betfair (PPB) 6,080.00p -0.08%
Halma (HLMA) 1,399.15p -0.06%
Lloyds Banking Group (LLOY) 57.01p 0.02%

FTSE 250 - Risers

UDG Healthcare Public Limited Company (UDG) 605.50p 8.42%
Crest Nicholson Holdings (CRST) 365.20p 6.91%
Intermediate Capital Group (ICP) 1,016.30p 4.61%
Electrocomponents (ECM) 558.20p 3.95%
Games Workshop Group (GAW) 3,030.00p 3.95%
Kaz Minerals (KAZ) 582.00p 3.74%
Intu Properties (INTU) 116.95p 3.73%
Vivo Energy (VVO) 130.00p 3.59%
Ferrexpo (FXPO) 216.30p 3.39%
CLS Holdings (CLI) 247.00p 3.35%

FTSE 250 - Fallers

PZ Cussons (PZC) 187.00p -10.78%
Royal Mail (RMG) 268.60p -10.68%
Domino's Pizza Group (DOM) 248.50p -9.27%
Metro Bank (MTRO) 1,351.00p -6.12%
TP ICAP (TCAP) 317.50p -2.07%
Mediclinic International (MDC) 299.90p -2.06%
TBC Bank Group (TBCG) 1,452.00p -1.89%
Sophos Group (SOPH) 308.07p -1.45%
Sports Direct International (SPD) 268.20p -1.40%
Wizz Air Holdings (WIZZ) 3,075.00p -1.35%