London midday: FTSE gains as Supreme Court upholds Brexit ruling
The FTSE 100 rose on Tuesday as the pound weakened after the Supreme Court ruled that Parliamentary consent is needed before invoking Article 50 of the formal Brexit process.
At 1155 GMT, the London index rose 0.21% to 7,166.40 points.
The pound declined 0.72% against the dollar to $1.2446 and dropped 0.32% versus the euro at €1.1607 after the Supreme Court upheld the ruling by the High Court, which said Parliament must vote on whether the government can trigger Article 50 of the Lisbon Treaty.
Justices voted with a majority of eight to three on Article 50, which starts a two-year clock on formal Brexit negotiations with the European Union.
However, the court also ruled that the government does not have to consult devolved administrations in Scotland, Wales and Northern Ireland before triggering Article 50.
Connor Campbell, financial analyst at Spreadex, said the ruling on government not having to consult the devolved parliaments of Scotland, Wales and Northern Ireland means Leave supporters were dealt the “softest blow of the possible outcomes”.
“And with Jeremy Corbyn already saying that Labour will ‘not frustrate the process for invoking Article 50’ the hurdles the government faces to get proceedings underway are of the eminently clearable kind,” Campbell said, adding that “all this meant that the pound didn’t get the boost it was looking for”.
On the data front, the Office for National Statistics said UK public sector borrowing, excluding banks, in December dropped 5% year-on-year to £6.9bn, beating expectations of £6.7bn. November’s shortfall was also revised down to £11.3bn from a previously reported £12.6bn.
Borrowing in the first nine months of the 2016/17 tax year declined 14.3% to £63.8bn compared to a year ago, putting Chancellor Philip Hammond on track to reach his goal for the current fiscal year of £68.2bn.
Howard Archer, chief UK and European economist at IHS Global Insight, said based on the figures in the first nine months, borrowing looks set to reach £64.6bn in the current fiscal year.
In the eurozone, traders were digesting services and manufacturing data.
Markit’s eurozone manufacturing purchasing managers’ index rose to 55.1 in January from 54.9 in December, exceeding analysts’ estimates for a reading of 54.8 and remaining above the 50 level that separates an expansion in sector activity from a contraction.
Eurozone services PMI, however, fell to 53.6 in January from 53.7 a month earlier, below projections for a level of 53.9.
It sent the composite PMI, which measures both services and manufacturing, down to 54.3 from 54.4, missing forecasts of 54.5.
Turning to afternoon trade, Markit’s US manufacturing PMI is released at 1445 GMT, US existing home sales data is due at 1500 GMT and the Richmond Fed manufacturing index is published at 1500 GMT.
On the company front, mining shares rallied following reports that commodity prices are likely be supported in the coming months by the impact of China's substantial state stimulus, with Bloomberg citing accounts that this boost to infrastructure demand will last well into the first half of 2017.
Anglo American, Rio Tinto , BHP Billiton and Antofagasta were among the top risers.
On the downside, Easyjet shares plummeted after it reported a drop in first quarter unit revenue as the effects of a weak sterling and fuel prices were worse than expected.
BT was under the cosh as it cut its profit guidance for the next two years after an investigation discovered accounting errors at the telecoms giant's Italian business led to increased write-downs, which comes on top of a deterioration in outlook for its UK public sector arm.
Imperial Leather soapmaker PZ Cussons slumped after it reported a 38% drop in pre-tax profit for the first half of the year due to challenging conditions in Nigeria in Australia.
Market Movers
FTSE 100 (UKX) 7,167.20 0.22%
FTSE 250 (MCX) 18,068.11 -0.26%
techMARK (TASX) 3,269.81 -1.14%
FTSE 100 - Risers
Anglo American (AAL) 1,384.50p 5.81%
Rio Tinto (RIO) 3,635.50p 4.63%
BHP Billiton (BLT) 1,502.00p 4.49%
Antofagasta (ANTO) 818.50p 3.67%
Glencore (GLEN) 330.00p 3.00%
Barclays (BARC) 228.00p 1.56%
Shire Plc (SHP) 4,382.00p 1.44%
CRH (CRH) 2,861.00p 1.38%
Imperial Brands (IMB) 3,627.00p 1.27%
Johnson Matthey (JMAT) 3,206.00p 1.20%
FTSE 100 - Fallers
BT Group (BT.A) 315.00p -17.66%
easyJet (EZJ) 981.50p -8.78%
Dixons Carphone (DC.) 319.20p -5.03%
Paddy Power Betfair (PPB) 8,025.00p -3.25%
Standard Life (SL.) 341.10p -2.85%
Rolls-Royce Holdings (RR.) 675.50p -2.31%
Capita (CPI) 510.00p -2.30%
Babcock International Group (BAB) 912.50p -2.14%
Associated British Foods (ABF) 2,469.00p -2.14%
Next (NXT) 3,824.00p -1.85%
FTSE 250 - Risers
Kaz Minerals (KAZ) 438.30p 3.54%
Renishaw (RSW) 2,811.00p 3.31%
Ferrexpo (FXPO) 140.70p 3.00%
Vedanta Resources (VED) 1,045.00p 2.96%
OneSavings Bank (OSB) 324.90p 2.33%
Evraz (EVR) 229.00p 2.23%
McCarthy & Stone (MCS) 168.60p 2.18%
Petrofac Ltd. (PFC) 937.50p 1.74%
Ted Baker (TED) 3,062.00p 1.42%
Scottish Mortgage Inv Trust (SMT) 340.50p 1.34%
FTSE 250 - Fallers
PZ Cussons (PZC) 308.00p -8.47%
William Hill (WMH) 264.10p -4.59%
TalkTalk Telecom Group (TALK) 157.30p -3.73%
Essentra (ESNT) 420.30p -3.11%
Ladbrokes Coral Group (LCL) 123.10p -2.46%
Mitie Group (MTO) 199.50p -2.35%
Greencore Group (GNC) 224.70p -2.35%
Marston's (MARS) 134.10p -2.26%
Wizz Air Holdings (WIZZ) 1,781.00p -2.14%
Greene King (GNK) 689.50p -2.06%