London open: Stocks rise ahead of Brexit vote; Royal Mail fails to deliver

London stocks rose at the open on Tuesday, recovering from losses in the previous session 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.

At 0830 GMT, the FTSE 100 was up 0.5% at 6,779.10, while the pound was down 0.1% against the dollar at 1.3149 and 0.2% lower versus the euro at 1.1489 ahead of the Commons vote.

Lukman Otunuga, research analyst at FXTM, said it remains unclear how the second parliamentary vote will play out, especially considering how ‘Plan B’ shares many similarities with ‘Plan A’ which was previously rejected by British MPs.

"Although the pending vote is not legally binding, it should provide fresh insight into what the House of Commons desires regarding Brexit. While there are more than a dozen amendments suggested, sterling is seen appreciating if the speaker chooses the Cooper and Brady amendments.

"Although expectations continue to mount over the government extending Article 50, it is worth noting that the unanimous agreement of all the remaining 27 EU countries will be needed for this to materialise. The truth of the matter remains that one must always expect the unexpected when dealing with Brexit, and the parliamentary Brexit vote this evening should be no exception."

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

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’ at Piper Jaffray, while Imperial Brands followed close behind.

Housebuilder Crest Nicholson edged higher despite posting a 15% drop in full-year profit amid Brexit uncertainty and said it expects a "difficult" first half of 2019, but with revenues and volumes both higher.

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.

Royal Mail tumbled, however, as it warned "business uncertainty" is hitting letter volumes despite a busy Christmas period for parcels. The letters and parcels group now expects to deliver adjusted group operating profit before transformation costs of £500-530m, from the £500-550m previously indicated.

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

BHP ticked a touch lower as it said no agreement had been reached over the financial obligations of its Samarco joint venture following the 2015 mine disaster that killed 19 people.

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 was downgraded to ‘hold’ at Berenberg, along with Halma, while Polymetal was cut to ‘hold’ at VTB Capital.

Market Movers

FTSE 100 (UKX) 6,779.10 0.47%
FTSE 250 (MCX) 18,547.19 0.07%
techMARK (TASX) 3,315.81 0.23%

FTSE 100 - Risers

British American Tobacco (BATS) 2,449.50p 3.14%
Imperial Brands (IMB) 2,413.00p 2.18%
Evraz (EVR) 483.88p 2.15%
Sainsbury (J) (SBRY) 283.00p 1.43%
Tesco (TSCO) 223.50p 1.13%
National Grid (NG.) 797.70p 1.12%
HSBC Holdings (HSBA) 637.60p 1.03%
RSA Insurance Group (RSA) 520.00p 0.97%
Antofagasta (ANTO) 821.00p 0.93%
United Utilities Group (UU.) 805.80p 0.90%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,734.00p -3.51%
Barratt Developments (BDEV) 529.60p -1.08%
Persimmon (PSN) 2,334.00p -0.93%
BHP Group (BHP) 1,607.20p -0.74%
Standard Life Aberdeen (SLA) 258.30p -0.48%
Berkeley Group Holdings (The) (BKG) 3,735.00p -0.40%
Ashtead Group (AHT) 1,926.50p -0.39%
Burberry Group (BRBY) 1,751.50p -0.37%
Melrose Industries (MRO) 160.35p -0.34%
Taylor Wimpey (TW.) 163.12p -0.32%

FTSE 250 - Risers

Intermediate Capital Group (ICP) 1,029.00p 5.92%
UDG Healthcare Public Limited Company (UDG) 578.00p 3.49%
Vivo Energy (VVO) 129.80p 3.43%
Intu Properties (INTU) 114.70p 1.73%
Cineworld Group (CINE) 269.80p 1.43%
TI Fluid Systems (TIFS) 172.10p 1.41%
Temple Bar Inv Trust (TMPL) 1,238.96p 1.22%
Aggreko (AGK) 718.40p 1.18%
IG Group Holdings (IGG) 619.00p 1.14%
Alliance Trust (ATST) 716.00p 1.13%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 258.20p -5.73%
Mediclinic International (MDC) 297.00p -3.00%
Morgan Advanced Materials (MGAM) 256.20p -1.84%
IWG (IWG) 216.60p -1.63%
888 Holdings (888) 168.90p -1.29%
Crest Nicholson Holdings (CRST) 337.38p -1.24%
IntegraFin Holding (IHP) 330.10p -1.20%
Metro Bank (MTRO) 1,421.81p -1.19%
Funding Circle Holdings (FCH) 326.50p -1.06%
Hill & Smith Holdings (HILS) 1,122.05p -1.05%