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FTSE 100 closes positively as Brexit rumblings continue but US, China trade noise boosts sentiment

Britain's blue-chip index finished 13.07 points higher at 7,163.64. The FTSE 250 gained 80.26 at 20,308.

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FTSE 100 closed higher as US, China trade talks and Brexit continue to dominate discussion

5.20pm: Footsie closes in positive territory

FTSE 100 index closed higher on Monday as sentiment was apparently boosted by the latest on US, China trade and hopes that a no-deal Brexit can be avoided, though confusion remains about the next stages for PM Boris Johnson's new plan in parliament.

Britain's blue-chip index finished 13.07 points higher at  7,163.64.

The more UK-company focused FTSE 250 gained 80.26 at 20,308.

On Wall Street, the Dow Jones Industrial Average added 26.71 points at 26,796.17, while the S&P500 gained 14.37 at 3,000.57

"US equity benchmarks are higher this afternoon as there are some positive noises coming from the US-China trade situation," noted David Madden, market analyst at CMC Markets, who added that China’s Vice Premier, Liu He, had said that ‘substantial progress’ was made.

The conciliatory commentary from the Chinese side bodes well from the possibility of an agreement being reached in November, said Madden.

Back to London and Brexit, speaker of the House of Commons, John Bercow blocked Johnson's bid to hold a 'meaningful vote' today on the new deal. The vote was halted on Saturday by an amendment, which was voted through by MPs, so that an extension had to be sought from the EU, in order to scrutinise the proposal.

3pm: US stocks start higher

US markets opened higher as expected, although the Dow’s progress was slowed by a 4.5% fall for troubled aerospace giant, Boeing.

The Dow Jones was up just 8 points (0.0%) at 26,778; unusually, the S&P 500 showed a sharper movement – up 12 points (0.4%) at 2,998.

In the UK, the FTSE 100 was 22 points (0.3%) to the good.

2.15pm: The Footsie builds up a head of steam

With the pound back below US$1.30, blue-chips have mustered up a head of steam ahead of what is expected to be a firm US opening.

The FTSE 100 was up 29 points (0.4%) at 7,180.

“The S&P 500 is coming off the back of a 0.4% decline on Friday where it finished at 2,986. Futures indicate we could be opening around 10 points higher, while the Dow is also seen about 60 points higher as Europe trades broadly higher,” reported Neil Wilson at markets.com.

Back in the UK, Anglo-Dutch consumer goods giant Reckitt Benckiser Group PLC (LON:RB.) was 1.5% lower after announcing the retirement of its chief financial officer (CFO), Adrian Hennah.

The company unveiled Jeff Carr as his replacement. Carr was previously CFO of Ahold Delhaize and is a non-executive director of Kingfisher plc (LON:KGF).

Nichols PLC (LON:NICL), the soft drinks company best known for Vimto, also has a new bean-counter. It is David Rattigan, who is currently the interim CFO of own-label goods maker McBride plc (LON:MCB). He will replace Tim Croston, who had previously announced his desire to move on by the end of June next year.

12.45pm: FTSE 100 edges higher as Brexitan stand-off continues

The Footsie has dawdled into positive territory but traders remain preoccupied with the shenanigans in Westminster.

London’s index of heavyweight shares was up 10 points (0.1%) at 7,160, helped by sterling giving up most of its earlier gains against the dollar.

There is still uncertainty over when the government will put a “meaningful vote” on the Brexit deal to parliament but Downing Street has confirmed it will yank the vote if the House of Commons tries to amend it with a so-called Letwin-style “not so fast, sunshine” law.

“Why is the government so keen on a meaningful vote when it also needs to pass a withdrawal agreement bill? The theory is that if it passed, then Boris Johnson would try to rescind his request to the EU for an Article 50 extension, arguing MPs have given their consent for a deal. This morning, No 10 refused to comment on whether this ruse could be tried,” reported Rowena Mason, the deputy political editor of The Guardian newspaper.

James Smith, the economist covering developed markets (the UK still qualifies) at ING, said it is fair to say the weekend did not go the way the prime minister, Boris Johnson, planned.

“Approval of the deal would have meant that the requirements of the so-called Benn Bill would have fallen by the wayside, meaning that there would have been a latent risk of 'no deal' Brexit on 31 October. These concerns saw MPs approve an amendment ensuring that the request for an Article 50 extension was triggered regardless.

“But despite this setback and with 10 days to go, the government is determined to get the Brexit deal ratified so that the UK can leave the EU on 31 October. To do this, parliament will need to pass the withdrawal agreement bill in super-fast time,” Smith explained.

The FTSE 250 has been a bit more sprightly than its big-cap brother but is not exactly dancing a jig at the prospect of another down-to-the-wire Brexitan stand-off.

The mid-cap index was up 39 points (0.2%) at 20,267, despite Micros Focus International PLC (LON:MCRO) diving 6.5% after Canada's Open Text Corporation said it was not planning to launch a bid for the UK legacy software specialist.

 

Retail investors' favourite Sirius Minerals PLC (LON:SXX) was also on the back foot, down 4% at 3.378p, as the market awaits news on its funding plans.

Offsetting these losses was a handsome 8.3% gain for property company Capital & Counties Properties PLC (LON:CAPC), which is in the sights of luxury property developer Nick Candy.

11.06am: S4 Capital shares well bid 

Share in Sir Martin Sorrell’s S4 Capital were well bid with the market continuing to react positively to the group’s latest acquisition. Earlier this month, S4 said it was snapping up Silicon Valley-based digital marketing firm Firewood for £120mln, backed by a £100mln share placing and open offer. Firewood, which has more than 300 employees and whose major client is Google, will merge with Amsterdam-based MediaMonks, a digital company that is S4’s biggest division. In morning trade the stock was 1.5% higher at 149.7p.

10.35am: After “super-let-down Saturday” it is “muddle through Monday”

After “super-let-down Saturday” it is “muddle through Monday” with traders once again adopting a wait-and-see posture.

After a bright start that saw the index knock on the door of the 7,200 level, the FTSE 100 has ebbed to 7,149, down one point on the day.

“We saw strong gains in the pound last week in anticipation of a Brexit deal but it was always likely to face challenges once it got to Parliament. Events on Saturday gave us another insight into just how little trust there is in Westminster and how MPs are not going to make Johnson's life any easier just because he's got a deal,” said Craig Erlam at Oanda.

“The pressure is unlikely to ease up on MPs though just because the extension request was sent to Brussels. Until they confirm that it's been accepted, there is still a risk of no-deal Brexit in 10 days time. The EU could wait until late in the day before accepting an extension in an attempt to pressure MPs to back Johnson's deal.

“This week is therefore likely to be another chaotic one in Westminster, as Boris tries to get Parliament to back his deal and MPs try to change it and attach conditions, like a second referendum. That will make for another volatile week for the currency as the drama unfolds and we learn whether we're actually leaving this time or not,” he added.

Sterling is currently a quarter of a cent firmer against the dollar at US$1.3000, which possibly accounts for the Footsie's middling performance.

Medical equipment maker Smith & Nephew PLC (LON:SN.) was under the weather, shedding 7.4% at 1,694.5p after the chief executive served notice to quit at the end of the month to pursue other opportunities outside of the UK.

“Can anything stop the exodus of FTSE 100 chief executives in 2019? The numbers have now been bolstered to the point where these departing CEOs could almost cobble together an 11-a-side football match as Smith & Nephew’s Namal Nawana steps down,” remarked Russ Mould, the investment director of AJ Bell.

“There appears to be a pretty simple reason Nawana is leaving – pay. It became apparent over the summer that the company was looking for ways to increase its head honcho’s remuneration with apparent discussions about a move to a US listing to escape an increasing backlash in the UK towards excessive executive pay.

“The fear will be that this revamp of the business will be derailed by Nawana’s departure despite efforts to allay these concerns – with internal candidate Roland Diggelmann stepping up to the top job and Nawana staying to smooth the transition until the end of the year.

“Diggelmann faces a tricky task of balancing the need for continuity with a likely ambition to bring his own ideas to the role,” Mould opined.

8.40am: FTSE 100 makes brighter than expected start amid tentative hopes of a Brexit deal 

The FTSE 100 made a brighter than anticipated start, rising 27 points to 7,177.01 amid tentative hopes of a Brexit breakthrough.

Prime Minister Boris Johnson is pushing for "a straight up-and-down vote" on the latest departure deal after MPs thwarted those efforts on Saturday.

On the market, NMC Health (LON:NMC), the Middle East-focused hospital operator, led the benchmark after it said it would post double-digit “bottom-line growth”. The shares rose 2.5%.

Pearson (LON:PSON) advanced 1.5% after Deutsche Bank upgraded its recommendation on the educational publisher.

The completion of the demerger of its M&G fund arm led to a 10% downward adjustment in the value of Prudential (LON:PRU), which analysts said was purely technical.

Just Eat’s (LON:JE.) latest trading failed to whet investors’ appetite as the shares fell 3% in early trade.

Proactive news headlines

Respiratory specialist Circassia Pharmaceuticals PLC (LON:CIR) will later on Monday announce the US launch of a new product for chronic obstructive pulmonary disease (COPD), describing the landmark as a “major strategic milestone”.

Gfinity PLC (LON:GFIN) has reduced its losses for 2019 after revenues at the esports tournament operator jumped by over 80%.

Ashley House PLC (LON:ASH), the supported care housing firm, has sold its half-share in Morgan Ashley Care Developments to its joint venture partner, Morgan Sindall.

Angling Direct PLC (LON:ANG) has opened its thirty-second store on Saturday and says more openings are planned in the coming months.

Ashley House PLC (LON:ASH), the supported care housing firm, has sold its half-share in Morgan Ashley Care Developments to its joint venture partner, Morgan Sindall.

Venture capital group Sure Ventures PLC (LON:SURE) expects the importance of Immotion Group PLC (LON:IMMO) to its net asset value to reduce as its portfolio starts to mature.

Woodbois Ltd (LON:WBI) said converting all the preference shares in its Argento subsidiary into convertible bonds will increase transparency and enable it to "take advantage of the many opportunities ahead".

Integumen PLC’s (LON:SKIN) wholly-owned subsidiary Rinocloud has won the TechLeaders19 IT award, which highlights the most innovative projects in the Irish tech sector.

Echo Energy PLC (LON:ECHO) is set to expand its footprint in Argentina with the acquisition of the Santa Cruz Sur asset package which includes production. It will pay US$7mln in cash, plus US$1.5mln worth of shares, for the acquisition supported by an equity raise and new convertible debt.

Block Energy PLC (LON:BLOE) has updated on its operations for the WR-38Z well at the West Rustavi field where it has completed a critical phase of the sidetrack programme. 

Nu-Oil and Gas PLC (LON:NUOG) has returned the equity it held in Enegi Oil Inc to Enegi with immediate effect, as it continues to execute the restructuring plan laid out earlier this month.

Bluejay Mining PLC (LON:JAY) has applied for an additional licence to expand its Kangerluarsuk zinc-lead-silver project in Greenland by more than five-fold.

Chaarat Gold Holdings Ltd (LON:CGH) said its newly acquired Kapan mine in Armenia is reaching its full potential and allowing the company to take advantage of the higher gold price.

Landore Resources Limited (LON:LND) is expecting an increased gold resource from its BAM deposit at the Junior Lake project in Ontario, Canada, following a drilling campaign at the site this year.

Arc Minerals Limited (LON:ARCM) said it has issued 6.5mln shares to its drilling contractor in Zambia under the first part of its drill for equity programme, with a price of roughly 3p per share representing consideration of £194,518 in part-settlement of the company's share of drilling costs incurred in the two months July and August 2019, with the £31,123 balance payable in cash. The drilling shares are subject to certain trading restrictions to the volume that can be traded.

Ariana Resources PLC (LON:AAU) has enjoyed one its strongest quarters ever for revenues generated. Production from the Kiziltepe mine in Turkey was just shy of 7,000oz and combined with a very strong gold price boosted sales said managing director Karim Sener.

Horizonte Minerals (LON:HZM) has completed a US$25mln royalty transaction with Orion Mine Finance and drawn down the funds.

6.37am: Brexit uncertainty to dominate 

Brexit uncertainty is set to make for a tentative start in London, with the index of blue-chip stocks set to open just five points higher at 7,155.77.

Boris Johnson is pushing for a ‘yes, or no’ Commons decision on his withdrawal deal later Monday after being thwarted in that aim during a tumultuous parliamentary session on Saturday. It is up to Speaker to allow a so-called meaningful vote.

In the aftermath of the first weekend sitting of the House in over 30 years, the PM has been forced to write a letter to the EU requesting a new delay to the ‘leave date’, but did not sign it.

This and the decision to send two other missives alongside has been interpreted as an attempt to thwart the will of parliament and is now the subject of Scottish legal action.

The EU, meanwhile, will decide whether to grant an extension. Reports suggest it is ready to roll over the process for another three months.

The confusion hit the pound overnight, which was down almost 0.7% from a five-month high against the dollar at US$1.2902.

Brexit brought a bout of the jitters to Asia’s main markets, which were mostly lower.

Around the markets: Gold US$1,493.80 an ounce, down 30 cents; Brent crude US$59.27, down 15 cents

The day’s major corporate news

Finals: Bioventix PLC (LON:BVXP), Gfinity PLC (LON:GFIN)

Interims: Trifast PLC (LON:TRI)

AGMs: Clipper (LON:CLG), CPL (LON:CPS), Mattioli Woods plc (LON:MTW)                

Business Headlines 

Financial Times

  • KPMG eyes cost cuts with ‘Project Zebra’ plan         
  • StanChart’s Bill Winters set to take pay cut
  • Russian cyber unit ‘masqueraded’ as Iranian hackers
  • Citi signals confidence in post-Brexit London

Times

  • Advent vows to keep jobs at Cobham
  • Top boss bought shares in companies his funds backed, claims BBC
  • Woodford fallout ‘hits promising firms’
  • UK ‘naive’ not to demand say at World Bank in exchange for aid
  • Valuations stretched on 50 UK companies, Quest warns

Daily Telegraph

  • Just do Brexit, says ex-Bank of England boss Mervyn King as City braces for volatility
  • 'Carpet Kings' plot to derail their old shops with nimbler rivals
  • Vernon Hill in the doghouse as Metro Bank targets his expenses budget
  • Boeing's board in emergency meetings as 737 Max crisis deepens
  • Purplebricks' new boss confesses 'we really took our eye off the ball in the UK'

Guardian

  • Tobacco firms accused of using gimmicks to subvert plain packaging
  • Qantas Dreamliner completes longest ever commercial flight
  • Former 666Bet director reportedly settles £67m claims with liquidators

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