London open: Stocks rebound cautiously ahead of Supreme Court ruling

London stocks inched back higher on Tuesday morning, with mining shares to the fore but caution in effect ahead of the imminent Brexit ruling from the Supreme Court.

After an hour of trading the FTSE 100 was up just 1.4 points to just over 7,152, while the FTSE 250 was down almost 50 points to a touch over 18,068.

"Today is a critical day for Theresa May, as the UK’s Supreme Court will decide on whether she will be given the power to trigger the Article 50," said analyst Ipek Ozkardeskaya at London Capita Group.

Lawmakers have reportedly told the Prime Minister her that any desire to push through a short piece of legislation could leave the government open to legal appeals, while any negotiations with non-EU countries could at this stage be considered illegal.

"The pound’s value is inversely proportional to the power Theresa May will be given in making the most critical Brexit decisions," Ozkardeskaya said, with the less power May carries, the stronger the pound will be.

The direction of the blue chip index is closely linked to currency movements this week, with the dollar's weakess boosting mining stocks for another day.

Commodities companies were also lifted by reports that prices are likely be supported in the coming months by the impact of China's substantial state stimulus, with Bloomberg citing accounts that this boost to infrastructure demand will last well into the first half of 2017.

Anglo American, up 4.6%, led the charge, with Antofagasta, BHP Billiton, Rio Tinto and Glencore a pace behind.

Going the other direction fast was BT, which delivered a profits warning linked to an accounting scandal at its Italian business.

The UK telecoms giant has been forced to more than triple its expected write-down to £530m and admit that full year revenues, profits and cash flow will be lower than expectations, exacerbated by a fourth-quarter slowdown in its UK business.

Analyst Neil Wilson at ETX Capital said it was a dark day for BT shares, which slid to their lowest in more than three years.

"The problem is that investors will fear that this is not the end – what else will be uncovered? The costs could yet rise and that fear is driving the selling this morning," he said.

EasyJet shares were also flying lower after the budget airline reported a “solid” first quarter with revenue, costs and passengers numbers in line with expectations, but the effects of weak sterling and fuel prices were worse than expected.

On the mid-cap index, Imperial Leather soapmaker PZ Cussons reported a 38% drop in pre-tax profit for the first half of the year, due to challenging conditions in Nigeria in Australia, while it maintained that it is on track to meet full year expectations.

Data-wise, analyst Mike van Dulken at Accendo Markets said January preliminary Eurozone PMI Manufacturing and Services are expected to be mixed with manufacturing easing from last month’s near six-year highs and services regaining some lost ground from their 2016 peak.

The same trend is expected in France and Germany.

UK Public Borrowing is seen falling back close to the 12-month average in December after November’s spike.

In the afternoon, he said US PMI Manufacturing was predicted to edge up to its highest since March 2015 while the Richmond Fed Manufacturing drops back after four straight months of improvement from a more than 3-year low, before US Existing Home Sales data is expected to show a fall from last month’s near 10-year highs.

Market Movers

FTSE 100 (UKX) 7,156.04 0.07%
FTSE 250 (MCX) 18,089.87 -0.14%
techMARK (TASX) 3,264.26 -1.31%

FTSE 100 - Risers

Anglo American (AAL) 1,368.50p 4.59%
Antofagasta (ANTO) 816.00p 3.36%
BHP Billiton (BLT) 1,483.50p 3.20%
Rio Tinto (RIO) 3,580.00p 3.04%
Glencore (GLEN) 328.10p 2.40%
CRH (CRH) 2,868.00p 1.63%
Croda International (CRDA) 3,400.00p 1.19%
Prudential (PRU) 1,556.00p 1.17%
London Stock Exchange Group (LSE) 3,133.00p 1.16%
Ashtead Group (AHT) 1,582.00p 1.09%

FTSE 100 - Fallers

BT Group (BT.A) 311.15p -18.66%
easyJet (EZJ) 997.00p -7.34%
Capita (CPI) 510.00p -2.30%
International Consolidated Airlines Group SA (CDI) (IAG) 480.60p -2.14%
Barratt Developments (BDEV) 477.80p -1.77%
Standard Life (SL.) 345.00p -1.74%
Dixons Carphone (DC.) 330.30p -1.73%
Taylor Wimpey (TW.) 165.80p -1.66%
Associated British Foods (ABF) 2,483.00p -1.59%
Rolls-Royce Holdings (RR.) 681.50p -1.45%

FTSE 250 - Risers

Evraz (EVR) 231.50p 3.35%
Kaz Minerals (KAZ) 433.10p 2.32%
Renishaw (RSW) 2,783.00p 2.28%
Vedanta Resources (VED) 1,036.00p 2.07%
Bankers Inv Trust (BNKR) 717.50p 1.34%
Tullow Oil (TLW) 300.40p 1.25%
IP Group (IPO) 192.70p 1.21%
Man Group (EMG) 126.90p 1.20%
Vesuvius (VSVS) 446.60p 1.18%
CYBG (CYBG) 285.20p 1.17%

FTSE 250 - Fallers

PZ Cussons (PZC) 309.40p -8.05%
TalkTalk Telecom Group (TALK) 154.50p -5.45%
Essentra (ESNT) 416.90p -3.90%
William Hill (WMH) 267.40p -3.40%
Shawbrook Group (SHAW) 230.60p -2.82%
BTG (BTG) 558.50p -2.62%
Hochschild Mining (HOC) 247.80p -2.21%
Greencore Group (GNC) 225.10p -2.17%
Henderson Group (HGG) 229.50p -2.09%
Bovis Homes Group (BVS) 804.00p -2.01%