Brexit news has little effect on London markets
Updated: Dec 9, 2019
Monday’s drama in the U.K. parliament seemed to do little for London markets, as speaker of the house John Bercow announced that he would not allow the government to proceed with a third vote on Prime Minister Theresa May’s Brexit deal without significant changes.
How did markets perform?
The pound GBPUSD, -0.0746% reacted dramatically to Bercow’s intervention Monday, but bounced back rapidly. It traded Tuesday at $1.3273, up 0.14% from $1.3254 at yesterday’s close.
The U.K.’s FTSE 100 UKX, -0.21% rose to 7,324.91, 0.36% above yesterday at 7299.19.
What’s driving the markets?
February U.K. unemployment figures surprised to the upside, coming in slightly below consensus at 3.9% down from 4% in January. The news didn’t have an outsize effect on markets however, as continued uncertainty over the U.K.’s exit from the European Union clouds all pictures.
The never-ending Brexit drama took another turn, though it’s unclear in what direction. There are steps May can take to work around Bercow’s announcement, but few signals that she planned to use them. Questions remain about whether May can build enough of a coalition to back her deal in a third vote, barring the kind of truly significant changes she has yet to agree with the EU.
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What stocks are active?
Chile-based mining company Antofagasta Plc ANTO, -2.76% is up 4.83% following its full-year earnings report where it showed a $543.7 million net profit (down 26% year over year) and planned cost savings in the coming year of $100 million.
Other companies whose earnings were cheered by the market include online groceries retailer Ocado Group Plc, OCDO, -0.45% up 3.57%. Its first half revenue rose 11.2% despite a fire at its depot in Andover.
Neil Wilson, chief market analyst for Markets.com: “Revenue growth was impacted by the fire in the quarter but Ocado’s investment thesis rests far less on U.K. retail sales than it does on its tech-based deals. Going forward, it will be very interesting to assess if there is any loss of revenues as customers switch from Ocado to [U.K. supermarket chain] Waitrose following the [joint venture with U.K. supermarket and retail giant] Marks & Spencer.”
Mining and steelmaking company Evraz Plc EVR, -1.45% led the decliners, falling 5.4% as a group of investors, reportedly including Russian oligarch and Chelsea F.C. soccer team owner Roman Abramovic, sold 25.4 million shares.
Shares in asset manager Schroders Plc SDR, +0.00% were stung by a U.K. arbitration panel ruling against retail bank Lloyds Banking Group Plc LLOY, -1.50% which was told was ‘not entitled’ to shift management of £109 billion in assets away from another asset manager to Schroders and BlackRock Inc BLK, -1.53% . Schroders shares are down 0.36%.