(Alliance News) - Sentiment globally was lifted overnight, but the internationally exposed FTSE 100 index failed to benefit on Thursday after the pound rose on further moves in Westminster to block a no-deal Brexit.
The FTSE 100 was 6.85 points, or 0.1%, lower at 7,304.41 early Thursday. The FTSE 250 was flat, just 3.28 points lower at 19,615.83, while the AIM All-Share was up 0.4% at 881.86.
The Cboe UK 100 index was 0.2% lower at 12,382.08. The Cboe UK 250 was flat at 17,460.91, and the Cboe UK Small Companies was down 0.1% at 10,825.99.
Sentiment was lifted overnight after the Chinese Commerce Ministry said top Chinese and US trade officials have agreed to meet in October to discuss solutions to their year-long trade war.
However, the FTSE 100 failed to capitalise on this after the pound strengthened on another government defeat in Westminster.
The UK government has 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.
He said all stages on the EU (Withdrawal) (No. 6) Bill will be completed in the Lords by 5pm on Friday. It is unclear what led to a breakthrough given the strong opposition of UK Prime Minister Boris Johnson's government to the Bill in the Commons.
The proposed legislation requires a delay to Brexit beyond October 31 unless a divorce deal is approved or Parliament agrees to leaving the EU without one by October 19.
This came after 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.
Sterling was quoted at USD1.2227 early Thursday, higher than USD1.2193 at the London equities close on Wednesday. Earlier this week, the pound had traded below the USD1.20 mark at levels not seen since 1985.
Indices in mainland Europe were faring better on Thursday, with the CAC 40 in Paris and the DAX 30 in Frankfurt both up 0.8%.
In German economic data, industrial orders declined in July.
New orders in July fell 2.7% on the previous month and were down 5.6% year-on-year.
In June, orders had risen by 2.7% from May but fallen by 3.5% on the same month a prior year. June's figures were revised in Thursday's release, having previously been reported as a 2.5% month-on-month rise and a 3.6% annual fall.
"Ouch," said ING.
"Today's data is the first hard data for the third quarter and it doesn't bode well at all. While tomorrow's industrial production data could bring some relief and latest confidence indicators still point to weak but positive growth, the combination of shrinking order books and high inventories suggests that the industrial slump will not be over any time soon," said ING economist Carsten Brzeski.
The economic events calendar to come on Thursday has 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.
In London, Melrose Industries was the top performer in the FTSE 100, up 6.3% after reporting a narrowed loss amid what it called a pleasing performance from the GKN businesses.
Revenue for the six months to the end of June came in at GBP5.70 billion, double the GBP2.85 billion achieved a year ago. The group's pretax loss narrowed to GBP128 million from GBP372 million.
Melrose said it is trading in line with expectations for 2019, with the three main divisions of GKN on track to achieve their targets. Having owned the GKN business for just over a year, Melrose said it is pleased with how they have responded to initial investments and initiatives.
Melrose declared an interim dividend of 1.7p per share, up 10% year-on-year.
"These results show the initial fruits of the 'improve' stage of Melrose's ownership of GKN and, with the overall GKN margin increasing positively, we are excited about what is possible. The performance is in line with expectations and leverage is better than expected," said Chair Justin Dowley.
FTSE 250-listed magazines publisher Future surged 11% after saying annual earnings before interest, tax, depreciation and amortisation is expected to be "materially ahead" of current board expectations.
Dixons Carphone was up 1.5% after the retailer said it is on track to meet its annual targets despite a challenging market for mobile phones.
UK & Ireland electricals like-for-like sales were up 2% in the 13 weeks to July 27, with International sales up 4%. However, UK & Ireland mobile comparable revenue was down 10% in "what continues to be a challenging traditional postpay market", meaning phones purchased on monthly contracts.
Despite this, Dixons said it is on track for both its trading this year and its longer-term transformation plans.
"The current political and economic climate is volatile but, assuming no material disruption from that, we stand by our full-year guidance, as we do our longer-term commitments on EBIT margin and cashflow," said Chief Executive Alex Baldock.
On a reported basis, Dixons group sales were flat in the period.
CYBG slumped to the bottom of the mid-cap index, down 19% after the lender late Wednesday said it expects to increase its legacy payment protection insurance costs for financial 2019 by between GBP300 million and GBP450 million.
CYBG, which operates the Clydesdale Bank and Yorkshire Bank brands and recently bought rival Virgin Money, said it saw a "significant spike" in payment protection insurance claims in the final days before the August 29 deadline.
On AIM, boohoo shares surged 12% after the online fashion retailer raised its annual guidance.
boohoo expects sales growth of between 33% and 38%, versus 25% to 30% seen previously. Its earnings before interest, tax, depreciation and amortisation margin should remain at around 10%, in line with previous guidance.
The firm said its performance has been ahead of expectations with strong revenue growth driving operating leverage across its key brands.
Future (FUTR)
Melrose (MRO)
CYBG (CYBG)
Boohoo (BOO)