London open: Stocks edge higher as May sets off for Brussels

London stocks edged higher in early trade as Theresa May headed to Brussels for an EU summit after surviving a no-confidence vote on her leadership.

At 0830 GMT, the FTSE 100 was up 0.4% to 6,904.63, while the pound was up 0.4% against the dollar at 1.2684 and 0.2% firmer versus the euro at 1.1135, paring gains after surging late on Wednesday as May survived the confidence vote, albeit with more dissenters than expected.

Konstantinos Anthis, head of research at ADSS, said: "So where does this leave us and the pound? In our view, nothing changed: granted, May got a boost as she cannot be challenged again for another year but regarding the Brexit negotiations things still remain the same. The UK Parliament seems unwilling to pass her draft and the EU has made it clear that there's no room to renegotiate.

"Time is running out for May and actually that's her best card right now: the longer the MPs resist voting in favour of her draft the odds of a hard Brexit continue to mount, something they want to avoid at all costs. This is a high-risk strategy for May but unfortunately it seems it's the only one left to use, which means that volatility and uncertainty will remain the dish of the day."

May will now head to Brussels in a bid to gain further reassurances from the EU that the Irish backstop - which will prevent the return of a hard border with Ireland - will not last indefinitely, as she scrambles to get support for her Brexit deal ahead of the Commons vote.

Investors were digesting the latest housing sector survey from the Royal Institution of Chartered Surveyors, which showed that the UK property market was at its weakest level in more than six years in November as worries about Brexit meant that buyers and sellers opted to sit tight.

The RICS house price balance slumped to -11 last month from -10 in October, marking its lowest reading since September 2012. Meanwhile, the number of people looking for a new home fell again in November, with the net balance down to -21 from -15 in October, its lowest level since September 2017, mostly on the back of Brexit-related uncertainty.

The outlook was equally downbeat, with sales expectations for the coming three months slumping to -23 in November from -6 the month before. This was the most substantial decline in this series since the EU referendum.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the survey shows that the downturn in the housing market is intensifying as households become increasingly concerned about the calamitous Brexit process.

"Until households can be sure that the economic status quo won’t change next year, we expect house prices to struggle. But even further ahead, house prices are set to rise less quickly than households’ incomes, as the MPC likely will pick up the pace of interest rate hikes next year."

On the corporate front, holiday group Tui was the standout gainer on the top-flight index as it reported a 10.9% increase in full-year earnings and said it expects similar growth next year.

Ocado edged up as the online grocery specialist reported 12% revenue growth from its UK retail operations in the final three months of 2018, in line with guidance for the full year.

Logistics company Bunzl rallied as it said full-year group revenue is expected to increase by between 8% and 9% at constant exchange rates due to organic growth of more than 4% and a similar impact from acquisitions, net of disposals. It also said it has recently acquired CM Supply, a foodservice distributor based in Copenhagen, Denmark for an undisclosed sum.

Security services firm G4S surged after saying it was reviewing options to spin-off its cash solutions division.

Sports Direct was feeling the burn as it posted a 27% drop in underlying interim profit weighed by losses at House of Fraser, which it bought back in August.

Ultra Electronics was the victim of a downgrade, suffering the heaviest losses on the FTSE 250 as Barclays cut the stock to 'underweight' from 'equalweight' and slashed the price target. This came as the company said in an update that it sees full-year results in line with expectations and that it continues to experience strong order inflow.

3i Group, Associated British Foods, Assura, BCA Marketplace, Halfords and Grainger were among the companies whose shares went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,904.63 0.36%
FTSE 250 (MCX) 18,020.52 0.18%
techMARK (TASX) 3,383.82 0.22%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,202.00p 5.53%
Bunzl (BNZL) 2,498.00p 3.82%
Antofagasta (ANTO) 811.40p 2.79%
WPP (WPP) 906.00p 2.77%
Shire Plc (SHP) 4,657.50p 2.59%
Anglo American (AAL) 1,710.20p 1.83%
Glencore (GLEN) 296.85p 1.82%
Royal Bank of Scotland Group (RBS) 212.20p 1.77%
easyJet (EZJ) 1,093.00p 1.63%
Taylor Wimpey (TW.) 138.55p 1.58%

FTSE 100 - Fallers

3i Group (III) 790.00p -1.89%
Associated British Foods (ABF) 2,172.00p -1.27%
BP (BP.) 510.50p -1.16%
Evraz (EVR) 475.00p -1.08%
Reckitt Benckiser Group (RB.) 6,305.00p -0.97%
Ferguson (FERG) 5,008.00p -0.85%
Admiral Group (ADM) 1,982.00p -0.78%
Paddy Power Betfair (PPB) 6,350.00p -0.55%
London Stock Exchange Group (LSE) 4,014.00p -0.55%
Sage Group (SGE) 599.20p -0.43%

FTSE 250 - Risers

G4S (GFS) 197.05p 7.47%
Superdry (SDRY) 375.40p 5.69%
Thomas Cook Group (TCG) 30.64p 4.08%
Spirent Communications (SPT) 118.20p 2.78%
Euromoney Institutional Investor (ERM) 1,198.00p 2.39%
William Hill (WMH) 160.95p 2.35%
TBC Bank Group (TBCG) 1,452.00p 2.25%
Morgan Advanced Materials (MGAM) 263.80p 2.09%
Babcock International Group (BAB) 542.80p 2.03%
Centamin (DI) (CEY) 104.62p 1.92%

FTSE 250 - Fallers

Ultra Electronics Holdings (ULE) 1,244.00p -9.92%
Elementis (ELM) 166.10p -7.67%
IP Group (IPO) 115.40p -5.25%
Spire Healthcare Group (SPI) 109.80p -4.69%
BCA Marketplace (BCA) 203.00p -3.79%
Hilton Food Group (HFG) 880.00p -3.51%
Grainger (GRI) 214.00p -2.19%
Ferrexpo (FXPO) 191.85p -1.69%
Dunelm Group (DNLM) 566.50p -1.65%
Metro Bank (MTRO) 1,894.00p -1.61%