London open: Stocks steady as pound holds up ahead of no-confidence vote

London's financial markets were eerily calm on Wednesday following Theresa May's Brexit defeat in Parliament, with investors seemingly assuaged by the prospect of a softer deal and possible extension of Article 50, as the Prime Minister braced for another challenge.

At 0830 GMT, the FTSE 100 was down 0.1% at 6,889.62, while the pound was up 0.1% against the dollar at 1.2876 and 0.2% firmer versus the euro at 1.1291.

Having lost the 'meaningful vote' on her Brexit plan by a record margin of 432 to 202, Labour leader Jeremy Corbyn tabled a vote of no confidence in the government.

May said if her government wins the confidence motion this evening, which is expected after the DUP and hardline Brexiteers guaranteed their backing, she will then open up Brexit negotiations to a cross-party approach. She will have until the end of next Monday to put forward a 'plan B' on Brexit.

Spreadex analyst Connor Campbell said: "Glancing at the markets, you’d be forgiven for thinking that all was well in Blighty.

"The no-confidence motion tabled by Labour seems to have given the currency a glimmer of hope that a softer Brexit, a Brexit delay, or, whisper it, no Brexit at all, might be in the offing.

"It is, admittedly, an optimistic view to take of a bungling, internationally humiliating, economically suicidal shambles of such severity it would be hilarious if it weren’t so serious. And it is very likely that the pound has a few more big swings in it before the week is out. But, for now, there is an eerie calm over the UK markets."

If they can take their eyes off Brexit news for a minute, investors will have a raft of UK inflation data to sift through at 0930 GMT.

In corporate news, education publisher Pearson was the standout loser on the FTSE 100 after saying it expects full-year profits to come in just above the middle of its target range and guided to growth of 8-18% for 2019. It said adjusted operating profit for 2018 would come in at around £540-545m, narrowing its range from the prior £520-560m. This feeds through to earnings per share of 70-71p.

Cineworld was also in the red as its trading update for the year to the end of December 2018 showed a softening in the fourth quarter, while Reckitt Benckiser fell as it announced that Rakesh Kapoor was planning to retire as chief executive by the end of this year.

On the upside, housebuilder Bovis Homes rose as it said profits for 2018 are expected to be "slightly ahead" of market consensus following a "significant" improvement in its operational performance.

Energean Oil & Gas was also higher as it posted a 56% jump in full-year revenue and a 45% increase in production.

In broker note action, Petrofac was upgraded to overweight at Morgan Stanley, while Hunting was lifted to 'equalweight'. Ashmore was cut to 'hold' at Berenberg and Restaurant Group was downgraded to 'sell' at Citi, while Anglo American was cut to 'hold' at SocGen.

Market Movers

FTSE 100 (UKX) 6,889.62 -0.08%
FTSE 250 (MCX) 18,459.20 0.16%
techMARK (TASX) 3,370.37 -0.05%

FTSE 100 - Risers

Evraz (EVR) 484.70p 1.59%
Aviva (AV.) 407.20p 1.47%
Taylor Wimpey (TW.) 157.48p 1.44%
Berkeley Group Holdings (The) (BKG) 3,773.00p 1.29%
Lloyds Banking Group (LLOY) 56.11p 1.03%
Next (NXT) 4,705.00p 0.97%
Burberry Group (BRBY) 1,780.50p 0.96%
Glencore (GLEN) 294.51p 0.95%
Barratt Developments (BDEV) 503.20p 0.94%
Legal & General Group (LGEN) 247.00p 0.94%

FTSE 100 - Fallers

Pearson (PSON) 930.20p -4.75%
Bunzl (BNZL) 2,379.00p -2.14%
Fresnillo (FRES) 902.81p -1.80%
Paddy Power Betfair (PPB) 6,115.00p -1.53%
ITV (ITV) 135.30p -1.46%
National Grid (NG.) 787.99p -1.22%
Unilever (ULVR) 4,044.00p -0.85%
London Stock Exchange Group (LSE) 4,434.00p -0.78%
Diageo (DGE) 2,732.00p -0.78%
Severn Trent (SVT) 1,841.50p -0.70%

FTSE 250 - Risers

Capita (CPI) 116.85p 3.96%
Vivo Energy (VVO) 134.90p 3.77%
Energean Oil & Gas (ENOG) 645.50p 3.56%
Hastings Group Holdings (HSTG) 198.40p 3.17%
Hunting (HTG) 563.00p 3.02%
Premier Oil (PMO) 70.99p 2.44%
Petrofac Ltd. (PFC) 549.60p 2.12%
Metro Bank (MTRO) 1,907.00p 2.09%
Ferrexpo (FXPO) 211.80p 1.97%
Elementis (ELM) 192.20p 1.80%

FTSE 250 - Fallers

Essentra (ESNT) 358.00p -2.40%
Rank Group (RNK) 155.40p -2.26%
Stagecoach Group (SGC) 146.50p -2.07%
John Laing Group (JLG) 338.60p -1.80%
NewRiver REIT (NRR) 210.00p -1.64%
Diploma (DPLM) 1,249.00p -1.50%
Card Factory (CARD) 167.20p -1.47%
Pennon Group (PNN) 718.20p -1.40%
Ashmore Group (ASHM) 366.92p -1.31%
Polypipe Group (PLP) 362.83p -1.30%