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FTSE falls, sterling stalls as May faces Brexit rebellion

The UK stock market falls but the pound holds steady as investors wait to see whether the prime minister can convince her divided Cabinet to back her Brexit deal with Europe.

FTSE falls, sterling stalls as May faces Brexit rebellion

The UK stock market fell but the pound held steady as investors waited to see whether Prime Minister Theresa May could convince her divided Cabinet to back her Brexit deal with Europe.

Having spiked yesterday afternoon on reports of an agreement with Brussels, the pound reflected the intense political uncertainty, edging lower to $1.296 to the dollar, with Brexiteers accusing May of having surrendered to the EU and the Northern Irish Democratic Unionist Party indicating it might not support her in Parliament.

The FTSE 100 slid 36 points, or 0.5%, to 7,019, in response to the sterling’s surge, which erodes the value of corporate overseas earnings.

European shares retreated after data showing Germany’s and Japan’s economies contracted in the third quarter.

Oil prices, which have fallen more than 20% in the past month, held broadly steady, despite fears of slowing growth. Brent crude futures edged higher to $65.52, and West Texas crude slipped 17 cents to $55.52 a barrel.

Office for National Statistics figures, meanwhile, showed inflation, measured according to the consumer prices index, and was flat at 2.4% in October. The retail prices index, which includes the impact of mortgage costs, was also unchanged, at 3.3%.

On the FTSE 100, miners dropped to the bottom of the index on fears over slowing global growth. Fallers included:

  • Antofagasta (ANTO) -4.2% at 738.6p
  • Evraz (EVRE) -3.6% at 518.2p
  • Rio Tinto (RIO) -3% at £37.30
  • BHP Billiton (BLT) -2.8% at £15.38

Micro Focus (MCRO) was the biggest riser, up 7.4% at £14.04, as analysts at Goldman Sachs upgraded the software company to 'buy'.

Companies with a focus on the UK domestic economy were also in demand as a potential Brexit deal neared.

ITV (ITV) rose 4.4% to 157.1p, B&Q owner Kingfisher (KGF) was up 3.1% at 253.3p and Next (NXT) added 2.7% to £54.22.

It was a similar story on the FTSE 250, where car dealership BCA Marketplace (BCA) rose 6.4% to 212.5p and Card Factory (CARDC) was up 2.5% at 194.7p.

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