BREAKING NEWS

Shares stage tentative recovery as May seeks Brexit deal tweaks

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The London Stock Exchange Group
The London Stock Exchange Group -
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TOBY MELVILLE(Reuters)
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UK shares sought to join a global equity recovery on Tuesday as the pound stabilised above 20-month lows, although banks and other domestically exposed stocks fell further as uncertainty grew over Britain's exit from the European Union.

The FTSE 100 <.FTSE> top share index rose 0.4 percent by 0936 GMT with gains in mining stocks and big exporters helping it outperform the domestically tilted FTSE 250 <.FTMC> index, which steadied just above two-year lows.

Prime Minister Theresa May will seek German Chancellor Angela Merkel's support on Tuesday for changes to the Brexit deal in a last minute bid to avoid a disorderly exit. The ultimate outcome will shape Britain's $2.8 trillion economy and have far-reaching consequences for the unity of the country.

"How both currency and index perform as the day does on is likely going to be completely dependent on the shape of Tuesday's political fallout," said Spreadex analyst Connor Campbell.

"Once again, talk of the 48 letters to trigger a vote of no confidence has appeared, though reports suggest that those seeking to oust May using this method are still short of that number," he said.

Data showing British wages rose the most in a decade in the three months to October had limited effect on UK stocks.

WPP traded up 3.8 percent. The shares had risen as much as 7.3 percent after the world's biggest advertising firm said it would put dividends over share buybacks as it laid out a three-year business plan.

"We give a cautious welcome to the new strategy announced this morning but feel it could have been more ambitious and wide-ranging," said Liberum analyst Ian Whittaker.

Among internationally exposed firms, GlaxoSmithKline rose 1.1 percent, tracking gains in its sector and following an upbeat note from Jefferies on prospects for large-cap European pharma firms.

Materials provided the biggest lift to the FTSE, as metal prices gained some ground on renewed optimism over the Sino-U.S. trade dispute. [MET/L] Shares in Rio Tinto , BHP and Glencore rose between 1.5 and 2.5 percent.

Banks were weaker, with shares in Lloyds and Royal Bank of Scotland both falling more than 1 percent to their lowest since 2016.

Also falling were Morrison Supermarket , down 2.4 percent, and Royal Mail , down 2.3 percent to a record low.

Standard Life Aberdeen fell 3.6 percent, leading losers on the FTSE after RBC cut the insurance company to "sector perform" from "outperform".

Property and casualty insurer Lancashire rose after an upgrade from the same broker.

Ashtead rose 4 percent after predicting full-year results would beat expectations, as its U.S. Sunbelt business rented out more industrial equipment in the first half of the year.

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