Brexit delay and cooling US-China tensions buoy UK markets
The London markets jumped higher on the back of news that Brexit has been delayed until potentially the end of January 2020 and improving tensions between the US and China.
Prime Minister Boris Johnson’s plan to push for a general election in December was greeted warmly by currency traders, with the pound also finishing the day in the green.
The FTSE 100 closed 6.81 points higher at 7,331.28 at the end of trading on Monday.
UK domestic-focused companies also welcomed the news that the UK would not be leaving the EU at the end of this month.
David Madden, market analyst at CMC Markets UK, said: “Stocks are higher on the back of the news that Brexit has been delayed until potentially the end of January 2020.”
Sterling moved higher on the news of the Brexit extension, but the rise remained modest as traders stayed cautious.
The pound was up 0.33% versus the US dollar at 1.286, and up 0.22% against the euro at 1.158.
The US markets leapt higher on Monday as sentiment remained upbeat on US-China trade talks.
In Europe, traders also cheered the news US president Donald Trump expects to sign a trade pact with China next month.
The German Dax increased by 0.37% while the French Cac moved 0.15% higher.
Connor Campbell, financial analyst at Spreadex, said: “Though it missed out on the record highs seen by the S&P 500 index, the Dow Jones nevertheless pushed higher on Monday as Donald Trump stoked the market’s trade hopes.
“The strength of the US open helped the European indices expand their own gains.”
In company news, HSBC slumped after it said it will speed up plans to remodel the bank after its chief executive singled out the poorly performing UK business just weeks after reports that up to 10,000 jobs could be cut.
Europe’s biggest bank stunned investors on Monday morning, as profit before tax fell 18% to 4.8 billion dollars (£3.7 billion) in the third quarter of the year.
Shares thus dived by 23p to 594.4p by the close of play.
Elsewhere, Just Eat edged higher as the takeover battle at the takeaway delivery firm continued to heat up.
Takeaway.com, which agreed a merger deal with Just Eat, launched an attack on investor Prosus, which has also made its own bid for the UK firm, and called for Prosus to withhold from voting on the proposed merger deal due to a “conflict of interest”.
Shares in Just Eat rose by 3.2p to 761p.
Shares in advertising tycoon Sir Martin Sorrell’s S4 Capital edged higher after he confirmed plans to expand the rapidly growing media empire with two new acquisitions in the UK and South Korea.
S4 Capital saw shares increase by 0.9p to 166.4p on Monday.
The price of oil fell into the red after the Chinese industrial profit fell 3.3% on an annual basis in September, showing a worsening situation in the country and cooling trends for the overall market.
The price of a barrel of Brent crude oil decreased by 0.71% to 61.5 US dollars.
The biggest risers on the FTSE 100 were Antofagasta, up 34.4p at 905p, 3i Group, up 33p at 1,130p, London Stock Exchange Group, up 204p at 7,022p, and Spirax-Sarco, up 205p at 7,800p.
The biggest fallers on the index were NMC Health, down 106p at 2,363p, HSBC Holdings, down 23p at 594.4p, M&G, down 5.2p at 220p, and Imperial Brands, down 40.4p at 1,779.6p.
