London open: Stocks edge down as sterling rallies on Brexit deal hopes

(Sharecast News) - London stocks edged lower in early trade on Friday as sterling rallied amid optimism that a no-deal Brexit can be avoided.
At 0840 BST, the FTSE 100 was down 0.2% at 7,339.07, while the pound was up 0.3% against the dollar at 1.2558 and 0.1% firmer versus the euro at 1.1349 after European Commission president Jean-Claude Juncker said that a no-deal Brexit would be "catastrophic" and that he is doing everything he can to get a deal.

In an interview with Sky News on Thursday, Juncker said he was prepared to remove the backstop from a withdrawal agreement as long as "alternative arrangements" are put in place to achieve the main objectives of the backstop. Juncker, who confirmed that he has been sent documents by Prime Minister Boris Johnson outlining draft ideas for a new deal, said: "I think we can have a deal."

Some analysts were sceptical, however. Craig Erlam, senior market analyst at Oanda, said: "Unfortunately, this late in the day, it's still unlikely that a new agreement can be reached without an extension. Perhaps that's why officials on the EU side are making a conscious effort to sound more open to a deal, as they don't want to fall into the trap of sounding dismissive and being blamed for any no-deal eventuality, which plays into Boris' hands.

"For now, traders are optimistic that no-deal is possibly less likely than it was, thanks to the bill passed in the British Parliament. The Supreme Court ruling may not make much of a difference, should they rule against Johnson's prorogation, but we should learn more today. Traders are clearly less pessimistic than they were but this is a wild ride and there's plenty more surprises still to come."

In equity markets, Rolls-Royce was weaker after it warned airline customers of further disruption as it made changes to its Trent 1000 engine repair programme on the Boeing 787 Dreamliner.

Asset manager Investec was on the back foot after it said interim profits at its UK banking business earnings would be "significantly lower" due to Brexit and global trade wars hitting fees and trading income. The company said headline earnings per share were expected to be 15% -18% lower year-on-year.

On the upside, housebuilders were the biggest gainers amid hopes that a Brexit deal can be reached by 31 October, with Persimmon, Barratt Developments and Taylor Wimpey all higher. Banks were also on the rise, with Lloyds and Barclays both up.

Retailer Next was sitting pretty at the top of the FTSE 100 index following heavy losses a day earlier on the back of its half-year results.

Engineer Smiths Group was in the black as it posted a jump in full-year profit and revenue, with all divisions apart from the detection business delivering growth.

RBS was trading up as it confirmed the appointment of Alison Rose as its new chief executive officer. Rose, who will be the bank's first female CEO, is currently deputy CEO of NatWest Holdings.

Market Movers

FTSE 100 (UKX) 7,339.07 -0.24%
FTSE 250 (MCX) 20,139.47 0.25%
techMARK (TASX) 3,888.82 -0.03%

FTSE 100 - Risers

Next (NXT) 5,972.00p 2.61%
Persimmon (PSN) 2,083.00p 2.61%
Barratt Developments (BDEV) 646.03p 2.28%
Sainsbury (J) (SBRY) 219.40p 2.09%
Lloyds Banking Group (LLOY) 55.17p 2.05%
International Consolidated Airlines Group SA (CDI) (IAG) 476.20p 1.99%
Morrison (Wm) Supermarkets (MRW) 202.30p 1.89%
Taylor Wimpey (TW.) 163.40p 1.68%
Smiths Group (SMIN) 1,667.00p 1.62%
Kingfisher (KGF) 197.75p 1.46%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 792.00p -2.20%
Johnson Matthey (JMAT) 3,101.00p -1.87%
NMC Health (NMC) 2,863.55p -1.83%
BAE Systems (BA.) 574.80p -1.78%
Smith (DS) (SMDS) 352.90p -1.62%
Evraz (EVR) 483.10p -1.55%
Melrose Industries (MRO) 204.50p -1.49%
Ashtead Group (AHT) 2,264.00p -1.44%
British American Tobacco (BATS) 2,919.50p -1.42%
Antofagasta (ANTO) 910.20p -1.41%

FTSE 250 - Risers

JPMorgan Indian Investment Trust (JII) 712.00p 3.94%
TBC Bank Group (TBCG) 1,286.00p 3.38%
CYBG (CYBG) 123.75p 3.00%
Vivo Energy (VVO) 128.80p 2.71%
Royal Mail (RMG) 229.10p 2.60%
Crest Nicholson Holdings (CRST) 381.00p 2.42%
Hochschild Mining (HOC) 209.40p 2.35%
Bakkavor Group (BAKK) 116.00p 2.29%
OneSavings Bank (OSB) 372.80p 2.25%
Stagecoach Group (SGC) 141.80p 2.24%

FTSE 250 - Fallers

Investec (INVP) 469.80p -4.00%
Provident Financial (PFG) 423.90p -3.99%
Sirius Minerals (SXX) 4.31p -2.53%
Spectris (SXS) 2,474.00p -1.79%
Hilton Food Group (HFG) 980.00p -1.71%
PZ Cussons (PZC) 208.75p -1.53%
Victrex plc (VCT) 2,110.00p -1.31%
Great Portland Estates (GPOR) 709.20p -1.25%
Card Factory (CARD) 162.00p -1.22%
Derwent London (DLN) 3,224.00p -1.16%