Pound sinks ahead of second Brexit parliamentary vote

stock market

The pound and the markets ended Monday in a gloomy mood as traders remained nervous over geopolitical developments.

Sterling fell 0.53% to 1.151 euros and was 0.29% lower against the dollar at 1.316 as optimism waned ahead of a series of Brexit votes in the House of Commons on Tuesday.

“After a few relatively calm days, Brexit is back centre stage ahead of a second parliamentary vote Tuesday,” said Fiona Cincotta, senior market analyst at City Index.

“Although the PM will argue her best to the contrary, nothing much seems to have changed in the content of her Brexit proposal or in the political mood over the last few days other than calls to postpone the March 29 deadline.”

Meanwhile the FTSE 100 sank into the red, shedding 62.12 points, or 0.91%, to close at 6,747.1.

David Madden, market analyst at CMC Markets UK, attributed the jitters to international trade fears.

“Stocks are lower this afternoon as investors continue to be worried about the state of US-China trade relations,” he said.

“The two sides will sit down to discuss trade later this week, and seeing as the sentiment has been less than optimistic recently, dealers are a little on the nervous side.”

In France the Cac was 0.76% lower while the German Dax fell 0.63%.

Oil prices were also weaker, dropping after industrial earnings data from both the US and China prompted fears of a global slowdown.

A barrel of Brent crude oil was trading 2.9% lower at 59.66 US dollars.

In London, City analysts greeted news that Tesco will make changes impacting as many as 9,000 jobs as “a long time in the making”.

Bruno Monteyne, an analyst at Bernstein and former supply chain director for Tesco Asia, said the changes did not necessarily suggest a recent downturn in performance.

“The market is obviously tough but we think this language is as much about reminding staff and unions why Tesco had to embark on this four-year restructuring programme rather than indicating that things got worse recently.”

Shares in the grocer were down 3.9p to 221p at the close.

Meanwhile Ocado closed 19.6p higher at 966p, leading the blue-chip index, on the back of reports that it is in talks about a possible partnership with Marks & Spencer.

News that the companies are in talks to launch a £1 billion food delivery service was welcomed by investors.

It was reported that M&S would buy the Waitrose part of the Ocado business, including distribution centres and vans, when the existing contract ends next year.

M&S shares also rose during the day but were broadly flat at the close, rising 0.3p to 290.3p.

Shares in energy consultancy Utilitywise plummeted after it said it had put itself up for sale and needs to raise £10 million in equity.

The share price plunged by more than 4p, or 71.38%, to just 1.16p.

The biggest risers on the FTSE 100 were Ocado up 19.6p to 966p, Rio Tinto up 66.5p to 3,944.5p, Carnival up 61p to 4,162p and Land Securities up 9.6p to 863.2p.

The biggest fallers on the FTSE 100 were NMC Health down 106p to 2,560p, ITV down 3.65p to 128.35p, Lloyds Banking Group down 1.57p to 57p and Barclays down 4.02p to 160.08p.