London open: Stocks rise as May seeks business backing for Brexit deal

Mon 19 Nov 2018

LONDON (SHARECAST) - (Sharecast News) - London stocks rose in early trade on Monday, with all eyes firmly on Brexit developments as Prime Minister Theresa May prepared to seek the backing of business leaders for her Brexit plan.
At 0830 GMT, the FTSE 100 was up 0.4% to 7,041.19, while the pound was up 0.3% against the dollar and the euro at 1.2874 and 1.1273, respectively, holding up - for now.

Theresa May was due to sell her Brexit plan to business later in the day when she makes a speech at the annual Confederation of British Industry conference. May is expected to insist that the withdrawal agreement cannot be changed and that the next steps will be to work on future trading relationships.

With ministers from the remaining 27 EU countries due to meet in Brussels this week ahead of the Brexit deal being finalised on Sunday, it remained to be seen whether the threshold of 48 letters to trigger a vote of no confidence in the PM would be reached.

CMC Markets analyst Michael Hewson said; "A satisfactory Brexit solution would appear further away than ever, and despite speculation that Graham Brady, head of the Conservative Party 1922 committee might well get the required 48 letters for a leadership challenge, we still seem no nearer to knowing whether the numbers are there than we did on Friday, which rather begs the question if they can't get the numbers now, will they ever be able to do so.

"It also raises another point in that even if they were to get the numbers, would they be able to get enough votes to force her out. If Sir Graham Brady is to be believed in comments made at the weekend, he suggested that the Prime Minister would win any confidence vote, which may help explain why a number of Brexit supporting cabinet ministers, including Michael Gove decided to stay."

Investors were also digesting a survey showing that UK house prices fell this month as new sellers priced their homes more realistically in the run-up to Christmas against a backdrop of stretched affordability and Brexit uncertainty.

House prices fell by 1.7% on the month in November versus a 1% increase in October, said Rightmove, marking the largest November drop since 2012. On the year, house prices were down 0.2% compared to a 0.9% rise in September.

Rightmove said that while it is normal for seller asking prices to fall at this time of the year, cooling markets in the south and in the upper price sectors, along with political uncertainty, have resulted in new sellers lowering their asking price aspirations earlier than usual.

The biggest declines were seen in London, where the typical asking price dropped by 1.7%, or 10,793. Rightmove said this was not unexpected as the capital usually sees greater seasonal volatility tan the rest of the country.

Miles Shipside, Rightmove director and housing market analyst, said: "New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual. Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism.

"This is a welcome effort by sellers to minimise the usual pre-Christmas market slowdown. Some new-to-the-market sellers and their agents have acted early to try to improve the buying mood and avoid the traditional 'buyer humbug' dislike of Christmas housing activity."

Housebuilders Berkeley, Barratt Developments and Persimmon were in the red.

Elsewhere, Babcock International was in the green as it played down a weekend report about a large write-down that the defence contractor will have to take to its accounts this week. After Sky News reported that a near-100m hit will be taken on the value of its he‎licopter business, the FTSE 250 group emphasised that it does "not expect the net cash costs to be material".

Miner BHP Billiton advanced after saying it had agreed with the Australian Taxation Office (ATO) to settle the transfer pricing dispute regarding its marketing operations in Singapore. The company said it would pay AUD $529m (301m) in additional taxes on income for 2003 to 2018.

Diploma rallied as it posted a 9% jump in full-year adjusted pre-tax profit and said it remains confident of further progress in the coming year.

CYBG ticked up as it announced that chief operating officer Debbie Crosbie was stepping down to take on the role of chief executive officer at TSB Bank.

Market Movers

FTSE 100 (UKX) 7,041.19 0.39%
FTSE 250 (MCX) 18,648.57 0.32%
techMARK (TASX) 3,394.24 0.44%

FTSE 100 - Risers

easyJet (EZJ) 1,189.00p 2.32%
Fresnillo (FRES) 883.00p 2.08%
Shire Plc (SHP) 4,653.50p 1.98%
International Consolidated Airlines Group SA (CDI) (IAG) 646.80p 1.95%
Micro Focus International (MCRO) 1,487.00p 1.61%
Antofagasta (ANTO) 822.40p 1.43%
Evraz (EVR) 559.00p 1.42%
Lloyds Banking Group (LLOY) 55.24p 1.36%
Barclays (BARC) 167.21p 1.35%
Melrose Industries (MRO) 173.70p 1.31%

FTSE 100 - Fallers

Ocado Group (OCDO) 740.40p -3.64%
Coca-Cola HBC AG (CDI) (CCH) 2,268.00p -1.35%
Royal Mail (RMG) 312.30p -1.17%
TUI AG Reg Shs (DI) (TUI) 1,269.80p -0.76%
Barratt Developments (BDEV) 499.20p -0.76%
Just Eat (JE.) 551.20p -0.68%
Berkeley Group Holdings (The) (BKG) 3,344.00p -0.65%
Burberry Group (BRBY) 1,807.00p -0.58%
Randgold Resources Ltd. (RRS) 6,374.00p -0.53%
Informa (INF) 734.00p -0.35%

FTSE 250 - Risers

Intermediate Capital Group (ICP) 1,031.00p 4.41%
Diploma (DPLM) 1,347.00p 4.02%
Kaz Minerals (KAZ) 545.60p 3.49%
Just Group (JUST) 88.45p 3.21%
Inchcape (INCH) 572.00p 2.60%
Hochschild Mining (HOC) 162.05p 2.34%
Thomas Cook Group (TCG) 47.84p 2.14%
Sanne Group (SNN) 564.00p 1.99%
Countryside Properties (CSP) 290.00p 1.97%
Ferrexpo (FXPO) 224.63p 1.83%

FTSE 250 - Fallers

Vivo Energy (VVO) 99.94p -8.53%
Hilton Food Group (HFG) 900.00p -4.66%
Contour Global (GLO) 157.60p -3.13%
Fisher (James) & Sons (FSJ) 1,638.00p -2.96%
TBC Bank Group (TBCG) 1,548.00p -2.52%
Millennium & Copthorne Hotels (MLC) 449.00p -2.39%
St. Modwen Properties (SMP) 368.60p -2.33%
Telecom Plus (TEP) 1,180.00p -1.99%
FDM Group (Holdings) (FDM) 868.00p -1.70%
Renishaw (RSW) 3,832.00p -1.44%
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