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Pound rallies, stocks slip on Supreme Court ruling

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By Reuters
Pound rallies, stocks slip on Supreme Court ruling
FILE PHOTO: UK pound coins plunge into water in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic/Illustration   -   Copyright  Dado Ruvic(Reuters)

LONDON (Reuters) – Sterling extended gains on Tuesday while eurozone stocks tumbled after Britain’s Supreme Court ruled that British Prime Minister Boris Johnson had acted unlawfully when he advised Queen Elizabeth to suspend Parliament this month.

The British currency gained as much as nearly 0.5% on the day to $1.2491 after the ruling while stocks tumbled on the back of a stronger pound. Against the euro, the pound rose 0.3% on the day to 88.06 pence.

British gilt yields rose following the decision, dragging safe-haven German bond yields higher.

British government bond futures fell to a session low of 133.12, down 60 ticks on the day, while 10-year gilt yields rose 3 basis points on the day to 0.585%.

“This is a win for the pro-remain side and suggests it will be harder for the government to push a no-deal brexit before the end of October,” said Chris Graham, senior economist at Standard Chartered Bank in London.

London’s blue-chip FTSE 100 hit its day low as sterling rallied after the ruling. A JPMorgan’s index tracking UK stocks that make their revenue at home hit their day highs on the news.

(Reporting by London Markets Team; Writing by Saikat Chatterjee; Editing by Dhara Ranasinghe)