London open: Stocks nudge down as sterling regains some composure
London stocks nudged lower in early trade on Friday as the pound regained some composure after European leaders gave the UK a few more weeks to leave the bloc.
After almost an hour of trading, the FTSE 100 was down 0.8% at 7,294.86, while sterling was up 0.7% against the euro at 1.1608 and flat versus the dollar at 1.3106, after the UK narrowly avoided an imminent no-deal Brexit, having slumped the day before as it looked like that outcome was likely.
EU leaders agreed on Thursday to grant an extension to 22 May if Theresa May is able to get her Brexit deal through the House of Commons on a third attempt next week. However, if the deal is rejected again, a shorter extension to 12 April will apply, which would in theory allow Parliament to explore alternative options.
European Council President Donald Tusk said "all options remain on the table…the UK government will still have a chance of a deal, no deal, a long extension or revoking Article 50" until 12 April.
"The 12th of April is a key date in terms of the UK deciding whether to hold European Parliament elections. If it has not decided to do so by then, the option of a long extension will automatically become impossible," he told a news conference.
Spreadex analyst Connor Campbell said: "Sterling started Friday’s session in something akin to recovery mode, Thursday’s Brussels ballyhoo just about taken as a positive."
But there is a "very real risk" that the Council's decision simply kicks the no-deal can down the road, said market analyst Neil Wilson at Markets.com.
"Minds are being focused and the deadlines cannot be extended forever. On the other hand, this could presage an abrupt change in course for the UK’s approach to Brexit," he said. "A lot depends on whether (assuming May fails to get her deal through on the third attempt), would she take Britain out without a deal, and/or would Parliament step in to prevent this.
"Of course, will the Speaker even allow a third vote? Assuming he does there is very little sense that Theresa May will get her deal through at the third attempt."
In equity markets, Unilever and Reckitt Benckiser, which have a strong international presence, lost ground as the pound popped higher.
Plastic packaging supplier RPC Group was in the red as Berry Global said it was not going to lift its £3.3bn bid for the company.
On the upside, Smiths Group rallied as it reported a decline in first-half profits that was still 2% ahead of consensus, and said it aims to demerge its medical devices arm by the middle of next year. On revenue up 2% to £1.57bn in the six months to 31 January, the FTSE 100 conglomerate made £246m of operating profits, which was down 2% on an underlying basis and 1% on a reported basis.
Education publisher Pearson was boosted by an upgrade to 'overweight' at JPMorgan and shares in temporary power supplier Aggreko shot higher on the back of an upgrade to 'buy' at Stifel.
Sanne, a provider of alternative asset and corporate services, saw its shares rise as it posted an 11.8% jump in full-year underlying pre-tax profit thanks to strong performances from its core businesses, particularly in EMEA and the US.
EasyJet gained after saying it was standing ready to activate its Brexit contingency plan of suspending shareholders' voting rights in respect of a small number of shares, given its EU ownership had still not reached the 50% plus one share level it required.
Senior edged up as it said its aerospace division has been selected by Saab to supply components for the Boeing T-X advanced pilot training system.
Royal Mail ticked higher as it announced the appointment of current deputy chairman and British Airways veteran Keith Williams as its new chairman.
Market Movers
FTSE 100 (UKX) 7,349.45 -0.08%
FTSE 250 (MCX) 19,399.96 0.27%
techMARK (TASX) 3,576.50 0.07%
FTSE 100 - Risers
Smiths Group (SMIN) 1,489.50p 3.12%
Ocado Group (OCDO) 1,269.00p 2.01%
Pearson (PSON) 850.20p 1.80%
Sage Group (SGE) 705.20p 1.64%
Barratt Developments (BDEV) 592.60p 1.33%
Micro Focus International (MCRO) 1,973.00p 1.15%
easyJet (EZJ) 1,189.00p 1.11%
Berkeley Group Holdings (The) (BKG) 3,834.00p 1.00%
Melrose Industries (MRO) 189.55p 0.82%
Marks & Spencer Group (MKS) 271.80p 0.82%
FTSE 100 - Fallers
AstraZeneca (AZN) 6,436.00p -1.36%
Unilever (ULVR) 4,350.62p -1.11%
Reckitt Benckiser Group (RB.) 6,490.00p -0.73%
British American Tobacco (BATS) 3,158.50p -0.68%
Royal Dutch Shell 'A' (RDSA) 2,442.50p -0.59%
Royal Dutch Shell 'B' (RDSB) 2,460.00p -0.53%
Vodafone Group (VOD) 146.02p -0.50%
Diageo (DGE) 3,126.50p -0.40%
Paddy Power Betfair (PPB) 5,915.00p -0.34%
WPP (WPP) 844.60p -0.33%
FTSE 250 - Risers
Aggreko (AGK) 807.20p 4.13%
Ashmore Group (ASHM) 432.40p 2.42%
Telecom Plus (TEP) 1,502.40p 2.34%
Indivior (INDV) 109.50p 2.24%
GVC Holdings (GVC) 543.00p 2.07%
Bank of Georgia Group (BGEO) 1,693.60p 2.02%
Sports Direct International (SPD) 293.50p 1.98%
Millennium & Copthorne Hotels (MLC) 475.00p 1.93%
Crest Nicholson Holdings (CRST) 360.00p 1.64%
Convatec Group (CTEC) 137.90p 1.62%
FTSE 250 - Fallers
Coats Group (COA) 80.10p -3.26%
Provident Financial (PFG) 520.00p -1.40%
Euromoney Institutional Investor (ERM) 1,202.00p -1.31%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 328.00p -1.20%
RIT Capital Partners (RCP) 2,096.50p -1.11%
JPMorgan American Inv Trust (JAM) 436.03p -1.01%
Kier Group (KIE) 395.20p -1.00%
RPC Group (RPC) 790.60p -0.98%
888 Holdings (888) 163.70p -0.97%
Ted Baker (TED) 1,587.00p -0.87%