Markets boosted by hopes of double breakthrough on Brexit and US-China trade war

Brexit and trade war optimism boosted global markets on Monday, as Commons Speaker John Bercow blocked the Government’s planned meaningful vote on its Brexit deal.

Prime Minister Boris Johnson was looking for support from MPs after pulling the vote on Saturday when they forced him to ask the EU to delay Brexit.

But Mr Bercow said that parliamentary conventions meant the Government could not bring the same vote again.

Five pound note
Brexit optimism in the markets helped push up the pound against the dollar (Yui Mok/PA)

The FTSE 100 dipped in the immediate aftermath of the news, but it bounced back soon after, closing the day up 13.07 points at 7,163.64.

However the rise was considerably below the morning peak of 7,196.42.

“Mr Johnson is hoping to get support for his deal in the next few days, and that has lifted sentiment in the markets,” said David Madden, an analyst at CMC Markets.

“Traders are petrified of a no-deal Brexit, so a deal, or even an extension would be welcome. Like many in the business community, dealers dislike uncertainty, so some clarification on a deal or a delay should assist stocks.”

Meanwhile, the market was boosted after Larry Kudlow, an economic adviser to US President Donald Trump, made positive noises over the country’s trade war with China.

“Things look pretty good,” he said. It helped push the FTSE higher despite downward pressure from the pound, which rose 0.45% to 1.2985 against the US dollar, said Connor Campbell, an analyst at Spreadex.

Sterling also rose against the euro, by 0.59% to 1.652.

“Of course, with everything Brexit nothing is certain, and things could well swing pound-negative in the next few sessions. However, at the moment investors feel comfortable with sending sterling to its best price since May,” Mr Campbell said.

Germany’s Dax was up by 1% to 12,758.44, while France’s Cac was up by 0.35% to 5,656.13.

In company news, private equity giant Advent International is ready to commit to the Government that it will protect UK jobs at Cobham as it seeks approval for its £4 billion takeover of the defence firm.

Just Eat has posted rapidly growing sales in the third quarter despite a backdrop of “softer consumer spending”.

The food delivery company saw sales jump 25% to £247.5 million in the three months to September, although this represented a slowdown from the prior half-year.

The boss of medical devices firm Smith & Nephew has announced plans to step down following a reported row over executive pay.

Namal Nawana is quitting as chief executive less than 18 months after joining the company from US diagnostics firm Alere.

M&G could be a candidate for a place in the FTSE 100 when the list is next updated as the investment manager reached a market value of nearly £6 billion on its first day of trading.

Europe-focused M&G spun off from Prudential on Monday morning in a bid to separate from the rest of its parent’s mainly Asia-focused business.

The top risers on the FTSE 100 were Auto Trader, up 21p at 551p, Melrose Industries, up 6.7p to 212.7p, IAG, up 16.4p to 525p, Centrica, up 2.2p to 72.2p, and DS Smith, up 8.7p at 347.5p.

The biggest fallers on the blue chip index were Prudential, down 140p to 1,366p, Smith and Nephew, down 162p to 1,667.5p, Just Eat, down 35.6p to 589.4p, Reckitt Benckiser, down 133p to 5,872p, and Croda International, down 102p to 4,628p.

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