UK shares fell to their lowest in nine days on Wednesday, taking their lead from Wall Street, amid worries that prime minister Theresa May will struggle to get her Brexit plan through parliament.
By mid-morning, the FTSE 100 was down 1 per cent, on track for its worst day since November 22nd. The FTSE 250 was down 0.3 per cent. In Dublin, the Iseq was 0.09 per cent weaker.
Sterling, which has see-sawed on Brexit news since the referendum, touched a 17-month low on Tuesday but recouped much of its overnight losses on Wednesday as optimism grew that Britain may not leave the EU without a deal in place.
On Tuesday, Mrs May suffered embarrassing defeats at the start of five days of debate leading up to a parliamentary vote on December 11th on her proposed agreement. “Most measures of sentiment and positioning in the UK show a loathing of all UK assets. Investors just have a revulsion for the UK,” said Paul O’Connor, head of the multi-asset team at Janus Henderson.
After a European Court of Justice opinion on Tuesday that Britain could unilaterally revoke Brexit if it wanted, JPMorgan said it now reckons the chances of Britain remaining in the bloc have increased to 40 per cent from 20 previously. Still, companies continue to prepare for the possibility of no deal.
Distribution contingency
Fashion retailer Joules said on Wednesday it would set up a distribution facility in the EU and bring inventory of its 2019 spring-summer collection into the UK earlier than usual as part of its contingency plan.
Oil stocks were the biggest drag on the blue chips, down 1.8 per cent. The price of crude fell on signs of an economic slowdown, before a meeting at which Opec is expected to decide on supply cuts.
Not far behind were financials. However, Barclays banking analysts said they saw room for material share price gains by UK banks and housebuilders if the Brexit deal passed in parliament.
