FTSE 100 dragged down by Brexit delay ahead of general election vote
The FTSE 100 edged down this morning as Brexit uncertainty lingered over the City.
European markets opened flat today, but UK traders took a more cautious approach ahead of another crucial day of voting in Parliament.
London’s blue-chip index fell by 0.5 per cent to roughly 7,297 points, while the Dax was down by 0.2 per cent and the Cac was trading flat.
Read more: UK house price growth subdued for 11th month in a row
The pound has also failed to budge this morning, hovering around the $1.28 mark.
Prime Minister Boris Johnson will today publish a bill calling for a general election on 12 December.
The vote would only need a simple majority for Johnson to call an election, rather than the two-thirds majority required under the Fixed-term Parliament Act that has scuppered his last three attempts.
“The delay to Brexit weighed on banking shares and in turn dragged the FTSE 100 down. The pound also took a step back, dipping 0.1 per cent against the US dollar to $1.2847. Not helping matters were mixed results from BP and new data showing the housing market is still stuck in the mud,” Russ Mould, investment director at AJ Bell, said.
UK house prices remained stagnant in Nationwide’s most recent data, released today, amid Brexit stasis.
Fiona Cincotta, City Index’s senior market analyst, said growth of 0.4 per cent in UK house prices may be a sign that buyers and sellers alike are beginning to press on regardless, however.
“While far from the strong growth of previous years, it is a signal that buyers may be saturated with Brexit worries and are going back to normal day-to-day decisions despite the paralysis on the political scene,” she said.
Meanwhile, the S&P and Nasdaq hit new highs last night amid growing optimism over a possible end to the US-China trade conflict.
The Nikkei 225 also reached new multi-month highs.
“The FTSE is trading almost half a percent lower this morning on a mix of corporate results and lingering uncertainty over Brexit,” Cincotta added.
“The oil sector took the hardest hit with BP reporting a 41% drop in net profits on a mix of lower oil prices during the last quarter and impairment charges linked to the sale of one of its US units.”
Read more: Retail stockpiling soars on Brexit uncertainty
David Madden, a market analyst at CMC Markets UK, said: “The optimism surrounding the US-China trade story helped equity markets in Europe, but the real benefit was seen in markets, where the S&P 500 plus the NASDAQ 100 registered fresh record highs.”
He added: “It is worth remembering the US-China trade deal was nearly wrapped up in May, but the talks turned sour, so nothing is a done deal until it is signed. Equity markets in Asia are mixed as the US-China trade situation is in focus.”