FTSE 100 was up almost nine at lunch as markets watch the changing of the guard at Number 10.
Theresa May will later be installed as the new UK Prime Minister after meeting with the Queen, and eyes will turn to her inital comments on what she plans to do regarding Brexit in the next few weeks and, significantly, the formation of a new Cabinet.
Also in focus is the Bank of England policy committee meet tomorrow, where the question is what will they do with interest rates.
A cut is broadly expected, but some commentators expect the stimulus measures to be more extensive than the market thinks.
Credit Suisse predicted it "will likely be more stimulatory than the market expects“.
The banks scribes expect the Central Bank to announce a 45bp cut plus £75bn of quantitative easing.
FTSE100 is up 8.71 at 6,689, while FTSE AIM100 gained 0.51% to 3,473 and the FTSE AIM All share gained 0.52% to 725.110.
The biggest gainer was Burberry Group (LON:BRBY), which gained 7.15% to 1,289p after it highlighted a ‘challenging external environment’.
Retail revenue amounted to £423mln, unchanged on an underlying basis, but all three of the group’s key regions experienced what Burberry described as “low single-digit percentage” decline in sales.
In small caps, a noteable gainer was boiler optimisation firm Sabien Technology Group Plc (LON:SNT), which shot up over 12% as it increased its sales pipeline, unveiled a new distribution agreement and shareholders approved a reorganisation of its capital.
OPEN
UK blue chips opened lower on Wednesday as traders brace for another sea change in UK politics and as big housing stocks took the brunt of selling.
David Cameron today bids goodbye to his Premiership and Number Ten and former Home Secretary Theresa May gets the keys.
She will be the second woman Prime Minister since Margaret Thatcher - also a Tory.
Markets hate uncertainty so the fact that there is a definite change of guard and things will be settled by tonight will be seen as a positive, but traders appear to be pausing for breath before deciding what direction to take.
The PM and shortly a Cabinet may be decided, albeit it without a wider Tory membership vote or a general election, but the direction and shape of Brexit and ensuing challenging EU talks, and future policy are frankly, at this stage, anyone's guess.
FTSE100 is down six at 6,674, while in small caps, the FTSE AIM 100 is unchanged at 3,456.
The FTSE AIM All share index is up 0.08% to 721.950.
Barratt Developments PLC (LON:BDEV) was the biggest loser, despite it saying that profit before tax was to increase by around 20% to £680mln.
But there were some cautious comments over Brexit and a dip in its reservations. Shares lost 4.69% to 393.90p.
A notable gainer was budget store Poundland (LON:PLND), which gained over 12% to 220.75p as it has agreed to be taken over by South African giant Steinhoff for £597mln.
The firm owns Harveys and Bensons for Beds in the UK.
Luxury fashion store Burberry (LON:BRBY) added over 3.6% to 44p each despite it warning that the market remains challenging and that the wholesale outlook has become more cautious .
Chief executive Christopher Bailey highlighted a ‘challenging external environment’ as the luxury brand revealed a 3% reduction in comparable sales for the three months to June 30.
Amphion Innovations Plc (LON:AMP) added 20% to 3.75p as it revealed partner firm Motif Bio Plc (LON:MTFB) is set to raise up to US$60mln from US investors and list on New York's NASDAQ exchange.
The fundraise would effectively double the size of the company, which is developing a next-generation antibiotic.
Premier African Minerals Limited (LON:PREM) shares dropped 7.41% to 0.63p. Yesterday, the firms said it expects the processing plant at the RHA Tungsten in Zimbabwe to be switched on this week.
London open
London’s blue chips edged lower despite US markets powering to another high overnight.
FTSE 100 opened 17 points down at 6,663 even there were some decent performances from the miners, Burberry (LON:BRBY) up 3% to 1,237p after a trading update and Smiths Group (LON:SMIN) up 5% to 1,153p.
Barratt spooked the housebuilders with some cautious comments over Brexit and a dip in its reservations. Shares fell 5% to 391p.
London preview
London’s FTSE 100 is set to start Wednesday lower, rather than follow the positive trading in both US and Asia.
US stock benchmarks paced to new highs during Tuesday’s trading session as calmer moods prompted bolder trading and most asset classes pushed higher. All in all, the worries have drifted into the background and buying has prevailed.
The Dow Jones gained 120 points, 0.66%, to 18,347 by the closing bell. The S&P 500 meanwhile rose around 15 points, 0.7%, to 2,152 - a record high closing marker - and the Nasdaq added 0.69% to 5,022.
Asian equities were mostly positive too. Japan’s Nikkei rose 0.9% to 16,247, while Hong Kong’s Hang Seng added 0.6% to 21,354 and the Shanghai Composite rose 0.45% to 3,062.
Australia’s ASX 200 gained 0.5% to 5,381.
For the UK, Wednesday is due to be a landmark day. Whilst expect the unexpected would be a prescient strategy of late, it is anticipated that today will see Theresa May become Britain’s new Prime Minister.
Michael Hewson, analyst at CMC Markets, highlighted that sterling enjoyed its best day in weeks on Tuesday thanks to ‘some form of certainty’ at the top of government.
“This new found stability may also have tempered some of the prospect of an imminent rate cut at tomorrow’s Bank of England rate meeting, given that credit conditions are significantly easier than they were three weeks ago, due to the relaxing of banks capital buffer requirements and the up to £250bn of available extra liquidity that can be called upon if required at the various liquidity auctions,” he added.
David Cameron is expected to face his final Prime Minister’s Questions before tendering his resignation to the Queen, and May will be ready to step into his shoes.
The FTSE 100 is seen about 25 points lower, by IG Markets, which an hour before the open calls the index at 6,647 to 6,652.