By Barbara Kollmeyer, MarketWatch
Banks rise on belief no-deal Brexit can be avoided
The British pound shook off early losses and moved higher, while U.K. stocks flattened out Monday, after lawmakers in the country voted to ask for a Brexit-deadline delay over the weekend.
Paring earlier losses, the pound rose 0.2% against the dollar to $1.2996 versus $1.2974 seen late Friday in North American trading. A 5.8% gain in October has kept the pound near levels not seen since May. The FTSE-100 meanwhile, was flat at 7,146.68.
Opinion:Johnson lost again. But his Brexit deal is likely to succeed (http://www.marketwatch.com/story/johnson-lost-again-but-his-brexit-deal-is-likely-to-succeed-2019-10-19)
After a crucial Parliamentary vote failed to get off the ground on Saturday, Prime Minister Boris Johnson was forced to send a letter to the EU asking for a three-month Brexit delay. Johnson, who is opposed to any delay, is expected to try to win parliamentary approval for his plan on Monday as the Oct. 31 Brexit deadline draws nearer.
Goldman Sachs analysts said they expect the deal will eventually pass, and for that reason expect the pound could rally to $1.35, though others were more cautious.
"So far, pound traders are content that a disorderly Brexit will likely be avoided in two weeks. Yet an early general election and maybe another Brexit referendum are on the U.K.'s political agenda for the coming months," said Ipek Ozkardeskaya, senior market analyst, told clients in a note.
Read: So what's next after the U.K. parliament's non-vote on Brexit? (http://www.marketwatch.com/story/so-whats-next-after-the-uk-parliaments-non-vote-on-brexit-2019-10-19)
As for stocks, the analyst said ongoing Brexit uncertainties could trigger volatility as that end-month deadline nears. And "small, midcap stocks would be more exposed than the blue-chip stocks which benefit from dollar denominated revenues," said Ozkardeskaya.
Banking stocks led the gain, which analysts attributed to a belief that a no-deal Brexit would be averted. Barclays PLC (BARC.LN) rose 1.2% and Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) rose near 3%. Shares of Prudential PLC (PRU.LN) tumbled 10%.
Shares of Smith & Nephew PLC (SN.LN) slid nearly 5% after the medical device maker said Chief Executive Namal Nawana will step down at the end of the month and be succeeded by Roland Diggelmann.
(END) Dow Jones Newswires
October 21, 2019 04:34 ET (08:34 GMT)
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