By Emily Horton
London markets inched up Wednesday, lifted by a weaker pound and a sizeable gain for British American Tobacco PLC.
How are markets performing?
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.05% rose 0.3% to 7,203.39 after finishing up 0.7% on Tuesday.
Meanwhile, the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0229% fell to $1.3140 from $1.3177 late in New York on Tuesday.
What’s driving the markets?
Global investors were sitting on their hands, waiting for more signals on the global trade front. The FTSE 100 shook off a modest earlier loss, with a positive surprise coming from a rebound in the services purchasing managers index, which rose to 51.3 from a prior 50.1.
The index picked up gains throughout the day, feeding off a strong pound, which was weighed by dollar strength and Brexit nervousness. In a note to clients, Michael Hewson, chief market analyst at CMC Markets, said skepticism was growing that “we might see another delay to any vote on changes to Prime Minister May’s deal, as MPs continue to steer away in coming out in support of it, and lean more to the possibility of an article 50 extension.”
Meanwhile, the Organization for Economic Cooperation and Development became the latest to ring alarm bells over Brexit, with projections for the economy to grow 0.8% in 2019, “just shy of half the already paltry 1.4% posted last year,” noted Connor Campbell, financial analyst at SpreadEx, in a note to clients.
“And that’s with a deal; without and the OECD warned the UK could plunge into a recession that would ‘generate sizeable negative spillovers on growth in other countries,’” said Campbell.
What stocks are active?
Online food-deliver company Just Eat PLC fell by 1% reporting a 44% gain in sales, but outlining higher delivery costs in the group’s earnings.
“Just Eat are trying to work with the same sort of branded restaurants their rivals are targeting, and offering their own delivery offering. None of this comes cheaply, and the costs are holding profits back.” Steve Clayton, manager of the Hargreaves Lansdown’s select funds, said in a client note.
Legal & General Group PLC
lost close to 4%, despite announcing a profit rise in 2018. “Shares have slid back from three year highs in early trading, no doubt due to some profit taking, after a 24% rise from the lows we saw in December,” said CMC’s Hewson.
Luxury fashion group Burberry PLC /zigman2/quotes/205386705/delayed UK:BRBY +0.04% fell by 4%.
Meanwhile, British American Tobacco PLC /zigman2/quotes/209116881/delayed UK:BATS +1.05% added 4% reclaiming some of its loses after Monday’s dip, while in Tullow Oil PLC /zigman2/quotes/205079109/delayed UK:TLW +2.47% rose 3%.