Sterling slide boosts Britain's FTSE 100 after parliament votes on Brexit

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Wed, 30 Jan 2019 - 08:57 GMT

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Wed, 30 Jan 2019 - 08:57 GMT

The economy has already been slowing over the last year as the impact of inflation, stemming from that steep fall in the value of sterling, has eroded households’ incomes ( Getty )

The economy has already been slowing over the last year as the impact of inflation, stemming from that steep fall in the value of sterling, has eroded households’ incomes ( Getty )

LONDON - 30 January 2019: Britain's blue-chip shares jumped on Wednesday after a sharp fall in sterling overnight when British lawmakers voted down a proposal in parliament that aimed to prevent a potentially chaotic "no-deal" Brexit.

The exporter-heavy FTSE 100 added 0.7 percent by 0842 GMT, building on its more than 1 percent rally on Tuesday ahead of the vote, while the FTSE 250, which is more domestically focused, was down 0.1 percent.

Global miners Rio Tinto, BHP Group, Anglo American, Glencore were the best FTSE 100 performers, rising between 1.9 and 3 percent, buoyed by a sharp rise in metal prices.

The main index is often boosted by a weaker domestic currency because its multinational companies earn a big portion of their revenue abroad in foreign currency.

Dollar earners British American Tobacco, GlaxoSmithKline, Diageo all rose.

That helped the FTSE 100 outperform European peers where caution dominated ahead of U.S.-China trade talks and the Federal Reserve's interest rate policy guidance .

Britain's parliament rejected a proposal to give parliament a path to prevent a potentially chaotic "no-deal" exit, but accepted two amendments - one seeking to replace the Irish backstop with alternative arrangements, and another rejecting the notion of a "no-deal" Brexit.

Following the vote, Goldman Sachs nudged up its estimated probability of a "no-deal" Brexit to 15 percent from 10 percent.

M&A drove some big moves in the small-cap area.

Ophir Energy jumped 6.5 percent to a six-month high after agreeing to be bought out by Indonesian oil and gas group Medco for a sweetened bid of 390.6 million pounds ($511.30 million) in cash.

Video advertising firm Taptica International surged 15 percent after saying it was in advanced talks to take over rival RhythmOne in an all-share deal. RhythmOne was about flat in early deals.

Wizz Air slid 2 percent after its third-quarter report, with a trader putting the fall down to a lack of upgrades to outlook.

Crest Nicholson also lost 2.3 percent after the Times reported https://www.thetimes.co.uk/edition/business/crest-nicholson-forced-to-halt-building-project-gmzd88prg that the housebuilder has put a 400 million pounds housing development in Hove on hold because of Brexit uncertainties.

IQE, which makes semiconductor wafers for chips used in Apple products, got a 4.4 percent boost from the iPhone maker's largely upbeat quarterly results overnight.

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