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* FTSE 100 down 0.5%, FTSE 250 down 0.6%
* Sterling rally on parliament suspension ruling
* Political uncertainties mount, hit domestic stocks
* Metro Bank falls after ditching bond issue
* Tour operator TUI among few gainers
(Changes analyst quotes, updates share prices)
By Shashwat Awasthi and Muvija M
Sept 24 (Reuters) - UK stocks stumbled on Tuesday after the
Supreme Court ruled that British Prime Minister Boris Johnson's
decision to shut down parliament in the run-up to Brexit was
unlawful.
The ruling, a major setback to Johnson who has promised to
deliver Brexit on Oct. 31 with or without a divorce deal with
the European Union, led the main index to close 0.5%
lower, lagging European markets.
"Whilst the Supreme Court has somewhat reduced the risk of a
no-deal Brexit by ensuring Parliament can make its voice heard
in the final weeks to the Brexit deadline, beyond that, the
ruling has not reduced uncertainty very much," City Index
analyst Ken Odeluga said.
The JP Morgan index that follows UK-listed companies making
their money abroad dropped to its lowest this month
as strengthening of the local currency meant the value of their
U.S. earnings would diminish.
The domestically-focussed FTSE 250 also fell 0.6%
with financials and industrials dragging the most, as most
market participants were still unsure as to how the already
chaotic Brexit process would now play out.
Banks with a larger exposure at home, including Barclays
and RBS moved lower, bringing an earlier
rebound in financial stocks to a halt.
"This latest twist in the Brexit narrative likely delays the
decision point for Brexit but does not make it any clearer
whether the UK will leave with a deal, without a deal or not at
all," said Edward Park, deputy chief investment officer at
Brooks Macdonald Asset Management.
The ruling took the spotlight away from news that the United
States and China will resume trade talks next month.
After its steepest monthly fall this year amid escalating
trade tensions and recession fears in August, the blue-chip
index has rebounded this month as various central banks have cut
interest rates to counteract slowing global growth.
Shrugging off a wider gloom, London-listed shares of tour
operator TUI rallied another 6.5% after it stuck to its
earnings forecast for the year, a day after the collapse of its
rival Thomas Cook.
Tobacco and nicotine e-cigarette makers Imperial Brands
and British American Tobacco shed 3.5% and
1.8%, respectively, as the U.S. Congress began hearings this
week about a mystery vaping-related lung disease.
Among midcaps, Card Factory gained 4% after
announcing results and a special dividend while A.G. Barr
added 3.4% as the soft drinks maker stuck to its annual
forecast despite a "disappointing" first half.
Small-cap Metro Bank sank 35% to a new life-low
after it ditched a 250 million pound bond issue on Monday after
failing to attract investors.
(Reporting by Yadarisa Shabong, Indranil Sarkar and Shashwat
Awasthi in Bengaluru and Josephine Mason in London; Editing by
Bernard Orr, Ed Osmond and Alexander Smith)
