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(Alliance News) - The FTSE 100 remained lower at midday on Thursday, in stark contrast to the solid US-China trade talk-driven gains seen over in Germany and France, as the pound continued its march higher on the diminishing likelihood of a no-deal Brexit.
The FTSE 100 was 49.81 points, or 0.7%, lower at 7,261.45 Thursday midday. The FTSE 250 was 18.56 points lower, or 0.1%, at 19,600.55, while the AIM All-Share was up 0.6% at 883.27.
The Cboe UK 100 index was 0.7% lower at 12,314.69. The Cboe UK 250 was flat at 17,467.26, and the Cboe UK Small Companies was down 0.2% at 10,814.99.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.9%.
Risk-on appetite returned on Thursday after the Chinese Commerce Ministry said Chinese and US trade officials have agreed to meet in October to discuss solutions to their year-long trade war.
In the US, Wall Street is on course for a solid start in the wake of the news, with the Dow Jones and S&P 500 both called up 0.9% and the Nasdaq seen 1.2% higher.
"Markets have seized on the less confrontational tone and are pushing higher this morning on optimism that these talks might actually be different, with the DAX and FTSE 100 opening higher, with the DAX pushing up to its highest levels in a month, while the FTSE 100 has slipped back on the back of a stronger pound," said Michael Hewson at CMC Markets.
Sterling was quoted at USD1.2332 Thursday midday, higher than USD1.2193 at the London equities close on Wednesday. Earlier this week, the pound had traded below the USD1.20 mark, near levels not seen since 1985.
The pound has been thrown a lifeline over the past few days by moves in Westminster to take a no-deal Brexit off the table.
The UK government last night paved the way for proposals seeking to block a no-deal Brexit on October 31 to become law before Parliament is suspended. Lord Ashton of Hyde, Conservative chief whip in the Lords, announced the breakthrough following talks with Labour after a lengthy procedural battle threatened to run through the night.
This came after UK Prime Minister Boris Johnson's snap general election plan was roundly rejected by MPs and his bid to keep a no-deal Brexit on the table suffered a major blow. The government failed to secure the support of two-thirds of MPs for an early election, with the Commons voting 298 to 55, 136 short of the number needed.
"As is often the case with Brexit there's a lot of moving parts here, with numerous side-stories and subplots, but the key thing as far as the markets are concerned is that the prospect of no deal is receding once more and this has caused the bounce we've seen in sterling," commented David Cheetham at XTB.
Now, Boris Johnson will ramp up the rhetoric against "cowardly" Labour leader Jeremy Corbyn as he effectively kicks off the campaign for a general election he has not yet been able to call.
Downing Street said Johnson would set out his case directly to the public on Thursday, claiming that Corbyn wants to "surrender" to Brussels by "begging" for a delay beyond the October 31 Brexit deadline. Corbyn suggested that an election was contingent on the passage of the EU (Withdrawal) (No 6) Bill which will require the prime minister to delay Brexit rather than go ahead with a no-deal exit on Halloween.
In London, ex-dividend stocks were weighing additionally on the FTSE 100.
Among blue-chips to go ex-dividend on Thursday were BHP Group, down 3.7%, Glencore, down 2.5%, and Micro Focus International, down 2.4%.
At the top of the blue-chip index remained Melrose Industries, up 6.3%, on a narrowed interim loss.
The industrial turnaround specialist reported a GBP128 million pretax loss for the six months ended June 30, well below its GBP372 million loss the year before. Revenue for the period was twice what it had been, totalling GBP5.70 billion versus GBP2.85 billion.
The big increase in revenue was the result of Melrose's GBP8.4 billion hostile takeover of GKN in 2018. Melrose said the "improve" phase of its turnaround of GKN is going well.
There were some guidance upgrades on Thursday, boosting the likes of FTSE 250-listed Future and AIM constituent boohoo.
Magazine publisher Future said adjusted annual earnings will be "materially" ahead of current board expectations following stronger-than-expected trading in the final quarter, leading shares to jump 10%.
It said it has seen a positive performance from Amazon Prime Day-related activity and strong ongoing trading in the US, as well as some additional benefits from foreign currency translations. Amazon Prime Day is an annual promotional event for Amazon Prime members. which this year was held in mid-July.
Online fashion retailer boohoo, meanwhile, advanced 15% as it upped its sales growth forecast for its current financial year.
Performance over the first half of boohoo's year ending February 2020 has beaten expectations, the company said, with revenue growth "strong". As a result, boohoo, which owns brands such as Nasty Gal and PrettyLittleThing, sees sales growth at 33% to 38% for the year, after prior guidance of 25% to 30%.
Shares in lender CYBG slumped 21% after the bank late Wednesday warned it expects to increase its legacy payment protection insurance costs for financial 2019 by between GBP300 million and GBP450 million.
The lender said about GBP100 million will be needed to cover the additional complaints, with a further GBP100 million needed for information request processing costs. An additional GBP100 million to GBP250 million is estimated to cover the cost of any potential payouts.
Network International shares declined 8.9% to 571.00p after Emirates NBD Bank and WP/GA Dubai sold 100 million shares in the payments business.
The investors sold the shares at 580 pence each, raising proceeds of GBP580 million in total. Network International will not receive any proceeds from the placing. Network International shares closed up 627p on Wednesday.
The economic events calendar to come on Thursday has a US services PMI at 1445 BST. Before this in the US is the ADP employment report at 1315 BST, a precursor to Friday's monthly jobs report.
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