LONDON MARKET CLOSE: Stocks Higher As Pound Sinks On Brexit Impasse

LONDON (Alliance News) - Stocks in London ended in the green on Thursday, with the FTSE 100 supported by weakness in the pound which fell after the political confusion in the UK over Brexit intensified. Additionally, investor sentiment was given a boost after a senior US administration official told Reuters that US and Chinese negotiators have made progress on the details of the written agreements to address US trade concerns."If you looked at the texts a month ago compared to today, we have moved forward in all areas," the official said but noted, "We aren't yet where we want to be."The report comes as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing for a new round of high-level talks with Chinese officials.The FTSE 100 index closed up 40.14 points, or 0.6%, at 7,234.33. The FTSE 250 ended up 14.85 points, or 0.1%, at 18,908.59, and the AIM All-Share closed up 5.41 points, or 0.9%, at 911.15.The Cboe UK 100 ended up 0.6% at 12,273.77, the Cboe UK 250 closed up 0.2% at 16,969.03, while the Cboe Small Companies ended up 0.3% at 11,156.95."GBP weakness continues to drive the FTSE 100 higher, providing some crumb of comfort to UK investors who are resigned to months of uncertainty. Parliament now needs to push towards fresh votes that strip away the least popular options last night, although this will have uncomfortable echoes of the repeated efforts to get the Meaningful Vote through. Until a clear alternative emerges, it seems difficult to envisage a way out of the impasse," said IG Group market analyst Chris Beauchamp. The pound was quoted at USD1.3044 at the London equities close, down from USD1.3222 at the close Wednesday, amid political deadlock after UK Prime Minister Theresa May failed to secure a majority for her Brexit withdrawal deal.The Government has signalled that MPs will be asked to vote on some form of Brexit motion in the Commons on Friday, fuelling speculation that May will ask them to approve the withdrawal agreement reached last November, but not the Political Declaration setting out plans for a future trade and security relationship with the EU.It comes after May told Tory MPs on Wednesday she would step down to let a successor take charge of the next phase of Brexit if her deal was passed.The prime minister's vow to resign if her deal goes through has convinced some key Tory Brexiteers to finally give their backing, raising hopes in Downing Street of a breakthrough.But with the DUP and a hardcore group of Tory Eurosceptics holding out against the deal, the government appears not to have the numbers in the Commons to be sure of victory."The pound has remained under pressure today, with the currency experiencing pretty much one-way trade ever since the DUP announced they would not support May's deal yesterday evening. The decline has been fairly steady and not too dramatic in its nature, but the move could well gather momentum in the next few days if the current political impasse shows no sign of abating with no-deal prospects seemingly being resurrected," said XTB analyst David Cheetham.In the FTSE 100, Johnson Matthey closed up 2.4% after the speciality chemicals firm said it achieved two "major strategic developments" for the commercialisation of its energy battery cathode materials eLNO.Among the developments, the firm said it secured a site in Poland for the construction of a commercial plant. Furthermore, it secured a long-term supply agreement with Nemaska Lithium Inc for the supply of lithium hydroxide over ten years, in order to match "expanding demands of commercial production".The two developments will allow Johnson Matthey to start commercial production in 2021-2022, in line with plans, the firm added.Imperial Brands and British American Tobacco closed up 2.4% and 2.1%, respectively, after Citigroup upgraded the tobacco stocks to Buy from Neutral."We are upgrading both Imperial Brands and BAT to Buy from Neutral, because they are still pricing in a discontinuity in earnings and cash flows, and we think that in 2019 the regulatory environment is likely to become less threatening, not more," the US bank said. At the other end of the large cap index, Schroders and Prudential closed down 2.9% and 2.3%, respectively, after the stocks went ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.Elsewhere, Debenhams closed down 25% after the struggling department store chain said that a majority of its noteholders agreed to the amendments proposed last week, allowing the company to proceed with a proposed GBP200 million fundraise. Debenhams said that the requisite consent level was achieved hours before the solicitations process was due to close. The conclusion of the solicitation process suggests a potential end to sportswear retailer Sports Direct International's plans to acquire Debenhams. Sports Direct, which holds a 29% stake in Debenhams, on Wednesday priced a potential offer for the remaining shares of Debenhams it does not hold at 5p each, valuing the firm GBP61.4 million. The offer, however, was conditional on Debenhams terminating the noteholder consent solicitation process as well as appointing Sports Direct boss Mike Ashley to its own board in the role of chief executive officer.Sports Direct closed up 0.3%.In Paris the CAC 40 ended down 0.1%, while the DAX 30 in Frankfurt ended up 0.1%. The euro stood at USD1.1223 at the European equities close, lower than USD1.1250 late Wednesday, following disappointing inflation figures from Germany.Germany's consumer price inflation slowed in March, defying expectations for stability, preliminary figures from the Federal Statistical Office showed.The consumer price index rose 1.3% year-on-year following a 1.5% climb in February. Economists had expected the rate of inflation to remain unchanged.The harmonized index of consumer prices, which is meant for EU comparison, climbed 1.5% annually, which was slightly slower than the 1.6% economists had forecast.Stocks in New York were lower at the London equities close as investors focused on moves in the bond market and slowing US economic growth.The DJIA was down 0.1%, the S&P 500 index down 0.2% and the Nasdaq Composite down 0.3%.Investors were digesting a report from the Commerce Department showing US economic growth slowed by more than previously estimated in the fourth quarter.The Commerce Department said GDP climbed by 2.2% in the fourth quarter compared to the previously reported 2.6% increase. Economists had expected the pace of growth to be downwardly revised to 2.4%.With the downward revision, the pace of GDP growth in the fourth quarter is notably slower than the 3.4% jump in the third quarter.Growth has been further hampered by the recent currency crises in a number of emerging market economies, including Turkey, while the US-China trade dispute has evidently caused a slowdown in economic growth in China, further weighing on Eurozone exports. With China and Eurozone struggling, and places such as Argentina and Venezuela being in crisis, investors fear that US exports might suffer in the months ahead, leading to a slowdown at the world's largest economy.In the bond market, treasuries are giving back ground after trending higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.1 basis points at 2.395%."The yield on longer-term US government bond yields have fallen below that of the shorter-term debt. In other words,nvestors expect long term US interest rates to remain around their current levels or fall as the Fed maintains an expansionary monetary policy stance for a lengthy period. But it is not just in the US, long-term bond yields have fallen across the major economies, as investors flocked back to the safety of government debt," said Forex.com analyst Fawad Razaqzada. "Whether these concerns are justified or not, the markets are flashing major warning signs for the global economy. We think this is good news for lower-yielding assets such as gold, especially if the US stock markets were to correct themselves," added Razaqzada. Over the past week, investors have fretted over the US yield curve inversion, where the longer term interest rate falls below shorter term interest rates.Gold was quoted at USD1,290.62 an ounce at the London equities close, down from USD1,310.50 late Wednesday, as the demand for safe-haven assets waned. Brent oil was quoted at USD67.45 a barrel at the London equities close, lower than USD67.62 at the close Wednesday. The economic events calendar on Friday has Germany retail sales numbers at 0700 GMT, France inflation readings at 0745 GMT, Germany unemployment figures at 0855 GMT and UK fourth-quarter GDP data at 0930 GMT. In the afternoon there is US personal spending data at 1230 GMT, including the core personal consumption expenditure index reading - the Fed's preferred inflation measure.The UK corporate calendar on Friday has interim results from commercial flooring maker James Halstead, Africa-focused oil & gas explorer BowLeven and veterinary services provider CVS Group.