London midday: Deal news lifts FTSE but gains capped by Brexit woes

(Sharecast News) - Deal news helped London stocks to push into the green by midday on Tuesday, with optimism over Sino-US trade relations also lending a hand, but gains were capped as Prime Minister Boris Johnson's Brexit deal faced its first parliamentary hurdle.
The FTSE 100 was up 0.4% at 7,192.99, while the pound was down 0.1% against the dollar at 1.2954 and flat versus the euro at 1.1627.

Neil Wilson, chief market analyst at Markets.com, said: "Boris Johnson will seek to push through his Brexit deal with a vote on the withdrawal bill, second reading, today. The numbers are tight, but No10 thinks it has just enough support to get it through. It would be a huge breakthrough as it would mark the first time MPs approving any Brexit deal.

"If the PM fails the key vote on the Withdrawal Agreement Bill, sterling could get spun back to $1.25 in short order. If it passes, a breach of $1.32 and thence a push to $1.34 seem likely."

Wilson added: "The deal premium which has already added c7% to sterling would collapse quickly if the deal gets scuppered. That said, the market is right now quite confident that no-deal is not such a risk now as it was - this appears to be overconfident until the necessary votes are passed."

Away from Brexit, investors grew hopeful after US President Donald Trump said China had signalled that trade talks were on course for a deal in November. During a Cabinet meeting at the White House on Monday, Trump said that China had started making the purchases of US agricultural products that he had pushed for as part of a deal.

In equity markets, Just Eat surged to the top of the FTSE 100 as investors considered the prospect of a bidding war after the online food delivery service said it had rejected an unsolicited £4.9bn cash offer from Prosus that "significantly undervalues" the company. Just Eat insisted that the all-share merger agreed with Takeaway.com in August provides its shareholders with greater value creation than the terms of the offer from Prosus, a spin-off from South African conglomerate Naspers.

Wilson said: "The Prosus offer is in many ways very cheeky and even more low-ball - it's still under the 731p initial offer from Takeaway.com and whilst it has been rejected, will certainly up the ante and could force Takeaway.com into raising its offer as it looks in a weakened position due to the stock's decline."

Elsewhere, Premier Inn owner Whitbread gained even as it posted a decline in half-year profits amid weaker trading conditions and high industry inflation.

Wealth manager St James's Place was up as it reported a 3.2% increase in third-quarter funds under management to a record £112.8bn.

Travis Perkins was on the front foot after saying it had paused the sale of its plumbing and heating business due to the current "unprecedented level of uncertainty" and reporting a jump in third-quarter sales.

On the downside, travel company TUI was knocked lower after Morgan Stanley downgraded its stance on the shares to 'equalweight' from 'overweight' as it cut its FY20 earnings per share estimate due to ongoing delays to the 737 MAX resumption.

Consumer goods giant Reckitt Benckiser was weaker as it cut its full-year sales growth forecast following a "disappointing" third quarter and warned that profit margins will fall amid slowing demand for some of its products in the US and China.



Market Movers

FTSE 100 (UKX) 7,192.99 0.41%
FTSE 250 (MCX) 20,305.15 -0.02%
techMARK (TASX) 3,789.25 0.27%

FTSE 100 - Risers

Just Eat (JE.) 741.60p 25.82%
Standard Chartered (STAN) 679.40p 2.17%
Whitbread (WTB) 4,285.00p 1.95%
Rightmove (RMV) 580.60p 1.90%
Flutter Entertainment (FLTR) 7,638.00p 1.84%
Rentokil Initial (RTO) 448.30p 1.77%
St James's Place (STJ) 1,030.00p 1.68%
Ferguson (FERG) 6,528.00p 1.49%
BP (BP.) 496.30p 1.29%
Standard Life Aberdeen (SLA) 292.50p 1.25%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,005.50p -5.72%
Bunzl (BNZL) 1,918.00p -4.00%
Reckitt Benckiser Group (RB.) 5,718.97p -2.61%
Antofagasta (ANTO) 861.20p -1.58%
Mondi (MNDI) 1,554.00p -1.02%
London Stock Exchange Group (LSE) 7,002.00p -1.02%
3i Group (III) 1,071.50p -0.92%
Halma (HLMA) 1,825.00p -0.84%
International Consolidated Airlines Group SA (CDI) (IAG) 520.60p -0.84%
InterContinental Hotels Group (IHG) 4,528.00p -0.70%

FTSE 250 - Risers

Trainline (TRN) 455.50p 4.83%
Travis Perkins (TPK) 1,539.50p 3.32%
Sirius Real Estate Ltd. (SRE) 75.10p 2.32%
CYBG (CYBG) 144.25p 2.30%
Provident Financial (PFG) 444.71p 1.88%
Domino's Pizza Group (DOM) 285.60p 1.82%
WH Smith (SMWH) 2,312.00p 1.67%
OneSavings Bank (OSB) 389.40p 1.67%
Safestore Holdings (SAFE) 703.50p 1.59%
Grafton Group Units (GFTU) 848.50p 1.43%

FTSE 250 - Fallers

Pagegroup (PAGE) 428.60p -3.73%
Ibstock (IBST) 249.62p -3.62%
Apax Global Alpha Limited (APAX) 160.00p -3.32%
Sanne Group (SNN) 538.00p -3.06%
Ferrexpo (FXPO) 130.80p -3.00%
Network International Holdings (NETW) 523.00p -2.79%
Restaurant Group (RTN) 147.50p -2.45%
Stagecoach Group (SGC) 148.08p -2.38%
Playtech (PTEC) 397.90p -2.36%
IP Group (IPO) 65.40p -2.24%