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London open: Stocks rise amid renewed Brexit deal optimism
London stocks rose in early trade on Tuesday amid renewed optimism that a Brexit deal is achievable, as investors eyed the release of key UK jobs data.
At 0840 BST, the FTSE 100 was up 0.3% at 7,233.22, while the pound was 0.5% higher against the dollar at 1.2665 and 0.5% firmer versus the euro at 1.1489 after the EU’s chief Brexit negotiator, Michel Barnier, said a Brexit deal is possible.
Speaking ahead of a meeting of EU ministers in Luxembourg, Barnier said: “This work has been intense all over the weekend and yesterday.
“Because, even if an agreement will be difficult – more and more difficult, to be frank – it is still possible this week.”
Spreadex analyst Connor Campbell said: “While Michel Barnier was keen to stress it has become ‘more difficult’ to reach an agreement this week, stating that it is ‘time to turn good intentions into legal texts’, his claim that it is ‘still possible’ for the UK and EU to come together on a deal was enough to restore the pound’s faith in proceedings, even if other members of the bloc were less convinced.”
Investors were looking ahead to the release of the ILO unemployment rate, claimant count and average earnings, all due at 0930 BST.
The unemployment rate for August is expected to remain unchanged at 3.8%, while weekly earnings growth excluding bonuses is expected to have eased to 3.7% from 3.8% in July.
In equity markets, banks were the standout performers, with Lloyds Banking Group, RBS and Barclays all higher.
Shares of homeware retailer Dunelm were boosted by an upgrade to ‘sector perform’ at RBC Capital Markets while Premier Inn owner Whitbread racked up healthy gains after an upgrade to ‘buy’ at UBS.
Hays rallied even as the recruitment firm reported a fall in net fee growth from the UK and Ireland as Brexit worries continued to dent business confidence, as its first-quarter results were better than expected. The company posted a 4% decline in UK first quarter net fee growth, with a 7% decrease in the private sector offsetting a 6% rise in the public sector.
Gambling operator Rank Group was on the front foot as it said group like-for-like net gaming revenue rose 10% in the first quarter, with total net gaming revenue up 9%.
Schroders rose after the asset manager said assets under management at the end of September came in at £450.8m versus £407.2m at the start of the year.
On the downside, miners were under pressure, with Rio Tinto, Anglo American and BHP all weaker.
Housebuilder Bellway was also lower as it posted a rise in full-year profit amid strong demand but warned over margin pressure.
Molten metal flow engineering company Vesuvius was trading sharply lower as it warned over full-year earnings amid weakening end markets.
Renishaw was also down as the engineer posted a decline in first-quarter profit and revenue, while pub group Marston’s retreated after warning over full-year profit.
