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FTSE leaps 100 points as MPs back May in Brexit vote

FTSE leaps 100 points as MPs back May in Brexit vote

Update: The FTSE 100 soared after the pound fell in response to MPs last night voting down proposals that would have prevented a messy 'no-deal' exit by the UK from the European Union.

The UK blue-chip index surged 108 points, or 1.6%, to 6,942, following the parliamentary vote where MPs voted 317 to 301 in favour of Theresa May seeking to renegotiate the 'Irish backstop' element of her UK withdrawal plan with EU officials.

Larger stocks were initially boosted by a sharp fall in the pound, which dropped below $1.30 against the dollar, as European Commission president Donald Tusk said the EU would not renegotiate the deal.

Sterling later recovered to $1.306 as traders considered an extension of Article 50 and a delay in the 29 March Brexit deadline was as likely as a no-deal scenario.

Janus Henderson head of UK multi-asset Paul O’Connor said: ‘While it is nevertheless still conceivable that the EU might yet be persuaded to make some adjustments to the backstop, it is unlikely that these will be significant enough to satisfy the 317 MPs who voted for the backstop to be “replaced” last night.

‘It is hard to avoid the conclusion that last night’s developments will achieve little more than running down the clock and we will be in a similar position in a couple of weeks to where we were before last night’s vote: a parliament that can’t deliver a majority vote on the Brexit deal on offer, nor on any of the other Brexit options such as no-deal Brexit, delayed Brexit, a general election or a second referendum.’

Mining companies were among the top performers in the FTSE 100, rising on hopes of a Sino-US trade deal as talks resume this week.  

Rio Tinto (RIO) climbed 1.4% to £41.33, BHP Group (BHPB) rose 2.6% to £16.72, Anglo American (AAL) was up 2.6% at £18.99 and Glencore (GLEN) was lifted 2.8% to 305.3p.

Oil majors also rose on trade optimism with Brent crude futures up 1.9% at $62.50 a barrel. BP (BP) up 1.7% to 511.4p and Shell (RDSb) climbed 1.7% to £22.85.

Shares in London Stock Exchange Group (LSE) saw a boost of 1.3% to £45.90 after buying an almost 5% stake in Euroclear, one of the world’s largest settlement houses.

AJ Bell investment director Russ Mould said it was an interesting move by LSE and ‘one that could stir up speculation of a full takeover down the line’.

‘Owning Euroclear would give the LSE a stronger position in the European settlement and custody market and there would theoretically be an opportunity for the LSE to improve the target’s financial performance,’ he said.

‘The big problem to overcome is rival firm ICE owning 10% of Euroclear’s equity and having a seat on the board. Would ICE instead prefer to own the LSE to stop its competitor having a strong position in the market?’

Shares outside the FTSE 100, which can be more UK-focused, made modest gains with the mid-cap FTSE 250 up 125 points, or 0.7%, to 18,827.

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