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The UK benchmark index has inched marginally higher in today’s session, reversing morning losses, after the Supreme Court ruled that the nation’s parliament must vote on whether the government can trigger the Brexit process. Gains in the Footsie, however, remain capped with a hefty drop in BT Group (LON:BT.A) weighing on the index after the former telecoms monopoly warned on profits as it wrote down the value of its Italian business by £530 million.
As of 12:17 GMT, the Footsie had inched 13.58 percent to stand 0.19 percent higher at 7,164.76. The blue-chip index has advanced, getting a lift from a pullback in the pound which retreated after the Supreme Court ruled that Prime Minister Theresa May must gain parliament’s approval before triggering Article 50.
“The court ruling is a slap in the face of the British government. However, parliament is likely to give its approval and the Brexit timeline could remain on track,” said Jawaid Afsar, senior trader at Securequity, as quoted by Reuters. “As far as investors are concerned, one more uncertainty is now out of the way and they can focus on other things.”
Connor Campbell at Spreadex meanwhile commented that the blue-chip index’s “gains no doubt would have been substantially larger if it were not for BT”. The former telecoms monopoly announced this morning that it had been forced to write down the value of its Italian business by £530 million following the discovery of inappropriate accounting behaviour. The bigger-than-expected writedown will pressure the group’s revenue, earnings and cash flow in 2017 and 2018. BT’s shares are currently changing hands 17.84 percent in the red at 314.30p.
The FTSE 100 index was 0.21 percent up at 7,166.43 points as of 12:25 GMT on Tuesday, 24 January 2017.
