ADVFN Morning London Market Report: Wednesday 16 October 2019

Share On Facebook

London open: Stocks steady as sterling hit by Brexit woes


London stocks were steady in early trade on Wednesday as sterling was hit by renewed doubts about a Brexit deal, helping the top-flight index to stay afloat despite souring relations between the US and China.

At 0840 BST, the FTSE 100 was flat at 7,210.07, while the pound was down 0.7% against the dollar at 1.2692, having surged to its highest level against the greenback since May on Tuesday on growing hopes of a Brexit deal. Against the euro, sterling was also 0.7% weaker, at 1.1504.

Downing Street said after Brexit talks ended on Tuesday that they had been “constructive” but there was “more work to do”.

However, the tone on Wednesday was more downbeat, with reports suggesting that the chances of a deal were low and that Northern Ireland’s Democratic Unionist Party was unlikely to lend its support.

EU and UK officials are set to resume Brexit talks later in the day ahead of a summit of EU leaders on Thursday.

Rabobank said: “The big question is whether this will all result in a new draft text that can be presented to the EU members’ delegations. The bigger question is whether the UK Parliament, and particularly the DUP, will lend their support for the agreement that is still being fleshed out. After a call with PM Johnson, DUP leader Arlene Foster stated that ‘gaps remain and further work is required’.

“Even if the DUP and hard-line Conservatives do ultimately lend their support, there is still a good chance that Boris Johnson will miss his own 31 October deadline. A short extension may be necessary simply to get all the technicalities in place. And in the worst case, if Johnson cannot gather the domestic support he needs, the UK could be looking at membership well into next year.”

Away from Brexit, there was renewed concern about Sino-US trade relations as China threatened to retaliate after the US House of Representatives on Tuesday passed three bills supporting the rights of pro-democracy protesters in Hong Kong. China’s foreign ministry condemned the bills, which still need to pass the Senate for approval.

Rabobank said there appears to be sufficient bipartisan support to ensure the bills are passed. It said whatever countermeasures China may be planning, “it surely won’t help the longevity of the limited trade truce between the two nations”.

In equity markets, Reckitt Benckiser was boosted by a re-initiation at ‘buy’ at Berenberg, while Go-Ahead was up after an upgrade to ‘buy’ at HSBC.

Private healthcare services company Mediclinic was on the front foot as said first-half revenue was up around 6.5%, while National Express gained after securing a 15-year bus contract in Morocco.

On the downside, mining giant Rio Tinto fell despite reporting a 5% rise in third-quarter iron ore shipments thanks to higher Chinese demand and backing its full-year iron ore shipment forecast.

Barratt Developments was under the cosh as the housebuilder said the new financial year had started well, with good demand for new homes, but that it continues to expect to grow volumes towards the lower end of its 3% to 5% medium-term target.

Hammerson was knocked lower by a downgrade to ‘sector perform’ at RBC Capital Markets.


CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch:

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20191122 18:17:34