By Dave Morris
London markets were unfazed by the Brexit deadlock, as financials led stocks higher for the fourth consecutive day.
How did markets perform?
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0368% was down after the latest Brexit vote results, sinking 0.4% to $1.3041 after gaining 0.9% Monday.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.97% led the regional gainers, up 0.6% to 7,362.5 following Monday’s rise of 0.5%.
What’s moving the markets?
If it were possible for Brexit to seem even more chaotic than before, the second set of meaningful votes Monday night achieved a unique degree of confusion. Even after narrowing the options following the first meaningful votes last week, there was still no majority in the U.K.’s Parliament for any of the options on offer, which included membership in a customs union and a referendum on any deal. Prime Minister Theresa May will hold a lengthy cabinet meeting Tuesday with a view to putting her deal up for a fourth vote, which still seems unlikely to pass. One thing was definitively decided: Conservative M.P. Nick Boles, a former minister whose attempts to foster compromise won him fans on both sides of the aisle, quit the party in frustration.
Oil has been on a bit of a tear, with key benchmarks hitting new year-to-date highs of $69.13/bbl for Brent. and $61.68/bbl for West Texas Intermediate (WTI). The commodity has been defying global growth fears thanks to Monday’s positive manufacturing purchasing managers index (PMI) survey figures in China. Reuters also reported that supply by members of the Organization of the Petroleum Exporting Countries (OPEC) hit a four-year low in March, thanks to Venezuelan output declines and Saudi Arabia supply reductions that exceeded their stated target.
Jasper Lawler, head of research at London Capital Group, said: “Investors were also cheering the prospect of further output cuts following encouraging remarks from Iran. Crude stockpiles will now be in focus, to assess the potential threat on oil prices.”
Which stocks are active?
U.K. auto maker and industrial firm Rolls-Royce PLC /zigman2/quotes/203646520/delayed UK:RR -0.70% took a hit to the tune of 1.8% on a report in the Financial Times that Singapore Airlines had grounded two of its fleet’s Boeing 787 Dreamliners on issues with the turbine blades in their Rolls-Royce engines. The airline said they had observed blades deteriorating prematurely; a Rolls-Royce spokesperson told the FT they had long advised operators that the blades had a “limited life cycle”.
Financials were among the biggest beneficiaries of Monday’s surge in bond yields, particularly in U.S. Treasurys. The 10-year note yield rose nearly eight basis points to close at 2.494, backing off slightly Tuesday to 2.473. Prudential PLC /zigman2/quotes/200530572/delayed UK:PRU -0.10% rose 2.5%, Standered Chartered /zigman2/quotes/200125072/delayed UK:STAN -1.71% as up 2.2% and Hargreaves Lansdown PLC was up 1.8%.