Hot Features
Premium
Register for streaming realtime charts, analysis tools, and prices.
London open: Stocks nudge higher as pound falls to eight-week low
Stocks in London nudged a touch higher in early trade, while the pound hit an eight-week low against the dollar after parliament gave Prime Minister Theresa May the green light to trigger Article 50 and start the process of leaving the European Union.
At 0830 GMT, the FTSE 100 was up 0.1% to 7,371.08. Meanwhile sterling was down 0.8% against the dollar to 1.2121 and 0.7% versus the euro at 1.1394.
Spreadex‘s Connor Campbell said: “The pound could be belatedly reacting to Nicola Sturgeon’s announcement of a second Scottish independence referendum, something that it basically ignored on Monday. Then there is the news that Article 50 will be triggered at the end of March – hardly an unforeseen problem, but one that carries a sting in its tail nonetheless.”
“In regards to the dollar’s muscular performance, the prospect of a rate hike from the Fed is putting pressure on cable from a US-direction, with sterling already softened up by the issues mentioned above (and that’s before we even get into the fact that the Bank of England could sound pretty dovish on Thursday).”
Theresa May has won the right to kick off divorce proceedings with the EU after parliament passed the Brexit Bill. The bill is now expected to receive Royal Assent and become law later on Tuesday.
May is expected to another two weeks before getting the Brexit process underway.
Meanwhile, Scottish First Minister Nicola Sturgeon outlined plans on Monday to hold a second independence referendum, an idea that was condemned by May, who said it would create “uncertainty and divisions”.
Away from Brexit, investors were likely to be erring on the side of caution ahead of Wednesday’s rate announcement by the Fed, amid expectations of a 25 basis points hike to between 0.75% and 1.00%.
Market participants were also digesting some solid data out of China, which showed factory output grew 6.3% in the first two months of the year while fixed-asset investment grew 8.9%, both beating expectations.
In corporate news, Antofagasta edged up as it said higher metals prices and lower cash costs helped push full year earnings before interest, tax, depreciation and amortisation up 78.7% to $1.6bn.
Ocado was on the front foot after it reported that sales growth remained in cruise control in the first quarter of 2017 and while order size continued to shrink it did so at a slower rate.
Oilfield services company Wood Group ticked higher after winning two contracts totalling $84.89m to provide engineering services to develop deepwater production for BP’s Mad Dog project in the Gulf of Mexico.
Specialist building products distributor SIG surged after it announced the appointment of Meinie Oldersma as it new chief executive as it reported a “disappointing” 2016.
JD Wetherspoon and Acacia Mining were lifted by rating upgrades from Peel Hunt.
FTSE 250 merchant bank Close Brothers edged higher as it reported a jump in first-half operating profit thanks to a solid performance across the business, and lifted its interim dividend.
TP ICAP was in the red despite posting full-year revenue that was just ahead of analysts’ expectations.
