The FTSE 100 has fallen into the red, weighed down by the pound's rise, but 'mid-cap' stocks and companies focused on the UK economy have rallied as investors laid bets the government's huge parliamentary defeat would lead to a Brexit delay.
The UK blue chip index fell 41 points, or 0.6%, to 6,854 as the pound traded at $1.288 against the dollar, up from a low of $1.27 running up to last night's vote, weighing on overseas earnings.
But stocks focused on the UK economy rallied, with house builders leading the way.
'The market believes we are going to get more time for negotiations, we're less likely to have a hard, economically-damaging Brexit, or Brexit won't happen at all,' AJ Bell investment director Russ Mould said.
Fiona Cincotta, senior market analyst at City Index, agreed. 'Traders are seeing this defeat as an opening towards the extension of Article 50, rather than the start of a no-deal Brexit,' she said.
Pearson (PSON) was the biggest FTSE 100 faller, down 6.3% at 914.8p as the educational publisher reported a 5% fall in revenues in a key US business.
The FTSE 250, which is more exposed to the UK economy than the blue-chip index, edged 0.2% higher.
As with the FTSE 100, house builders were among the biggest risers. Bovis (BVS) led the way, up 5.4% at 976.6p after reporting full-year profit was likely to beat market expectations.