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London open: Stocks push higher but sterling slumps on Brexit trigger
London stocks edged higher in early trade, taking their cue from an upbeat session in Asia, but the pound was under pressure as Prime Minister Theresa May said she would trigger Article 50 by March.
At 0830 BST, the FTSE 100 was up 0.5% to 6,932.75.
It was a different story for the pound, however, which fell 0.9% to $1.2852. FXTM chief market strategist Hussein Sayed said: “The pound’s imminent reaction was a drop of 0.5% against the dollar in early Asian trading session, nothing compared to the 11% freefall after U.K.’s vote to leave the EU on June 23. Now with the timeline being set, the negotiation of the terms will be a key driver forsterling going forward, but I expect it to be rough ride in the next few months.”
Meanwhile, oil prices slipped back as investors continued to mull over last week’s agreement by the Organisation of Petroleum Exporting Countries. West Texas Intermediate was down 0.4% at $48.06 a barrel and Brent crude was 0.2% weaker at $50.10.
At the weekend, May said the UK will begin the formal Brexit negotiation process by the end of March 2017 with the aim of leaving the European Union by the summer of 2019.
In her first Tory Party conference, the PM said the government would strike a deal with the EU as an “independent, sovereign” UK.
On the corporate front, Henderson Group surged after agreeing a $6bn merger with US fund management peer Janus Capital.
Quality assurance provider Intertek edged up after saying it has bought EWA Canada, a cyber security specialist, from Electronic Warfare Associates to take hold of an opportunity in the internet of things market.
AstraZeneca advanced as it global biologics research and development arm MedImmune entered into a licensing agreement with Allergan for the global rights to MEDI2070, which is currently in a Phase IIb clinical trial for moderate-to-severe Crohn’s disease and ready for Phase II for ulcerative colitis.
Paragon Group of Companies rose after announcing it has acquired asset finance brokerage Premier Asset Finance through Paragon Bank’s asset finance division, Paragon Bank Asset Finance Limited, for an initial consideration of £8.5m in cash.
LondonMetric was little changed as it sold Pierpoint Retail Park in Kings Lynn for £24m and Damolly Retail Park in Newry, Northern Ireland, for £30.7m.
On the macroeconomic calendar, UK manufacturing PMI is at 0930 BST, while in the US, construction spending and ISM manufacturing are at 1500 BST.
