• FTSE 100 ends 40 points lower

  • Sterling higher as ‘no deal’ Brexit risk fades

  • MPs pass Brexit delay bill, vote against general election 

5.10pm: Weak finish for Footsie

The FTSE 100 index closed in the red on Thursday, dragged down by another rise in sterling, which was bolstered as fears of a ‘no-deal’ Brexit faded.

The UK’s premier share index is usually hit when the pound rises because many of the big companies in it earn their revenues in US dollars.

The pound added 0.60% to $1.2325 against the US currency.

The Footsie closed 40.09 points lower on the day at 7,271.17, while the more domestically-focused FTSE 250 index went in the opposite direction, gaining 30.45 points to stand at 19,649.56.

Over on Wall Street, the Dow Jones Industrial Average added 417.09 points, while the S&P 500 index gained 38.49 and the Nasdaq advanced 122.28 points as worries over the US/China trade war receded.

It came after a report said that China and the US will resume trade negotiations early in October, which prompted optimism that a resolution will be found.

3.30pm: PPI provisions in the frame

Lloyds Banking Group PLC (LON:LLOY), Barclays PLC (LON:BARC) and HSBC Holdings (LON:HSBA) are expected to unveil large increases in PPI provisions, UBS analysts have warned.

CYBG warned overnight that it expected to make a further £300mln-£450mln of provisions for costs for historical payment protection insurance misselling after receiving more than eight months’ worth of customer enquiries in August.

The “unprecedented volume” of PPI information requests received last month came in the run up to the PPI complaint deadline of 29 August, which CYBG said was in line with the rest of the industry.

Shares in CYBG were down 21% to 110.4p.

Royal Bank of Scotland Group PLC (LON:RBS) announced a £600mln-£900mln provision on Wednesday but its shares were up 4.07% to 191.55p today, helped by a stronger pound and expectations that a bill to delay Brexit would be passed.  Shares in FTSE 100 rivals Lloyds and Barclays were also higher. 

UBS said it “looks fairly obvious to us that very significant increase in the complaints volume in August is what the broader industry experienced”

Analysts at the bank saw “negative read-across to other UK banks, including Lloyds, Barclays and HSBC as reasonable, with updates from these banks looking increasingly likely in the light of CYBG’s announcement”.

2.45pm: US stocks open in positive territory

US stocks opened higher as traders cheered stronger-than-expected private sector jobs data and news that Washington and China have agreed a tentative date to resume trade talks.

The Dow Jones Industrial Average rose 339 points to 26,694, the S&P 500 gained 31 points to 2,968 ad the Nasdaq increased 102 to 8,079.

China’s Commerce Ministry said that Beijing and Washington had set a tentative date for “early October” to discuss tariffs. US trade officials confirmed the talks.

In economic data, the ADP revealed private-sector payrolls rose 195,000 in August, more than the 148,000 expected. However, July’s figure was revised down to 142,000 from 156,000 previously.

Another report from the Labor Department showed jobless claims rose by 1,000 to 217,000 in the week ended 31 August, more than the 215,000 claims expected.

The more stable monthly average of new claims increased by 1,500 to 216,250.

Both jobs reports come ahead of the Labor Department’s all-important non-farm payrolls report on Friday, which is expected to show a 160,000 rise in employment for August.

On this side of the pond, the FTSE 100 is down 60 points to 7,250 as the pound has strengthened on expectations that MPs will succeed in delaying Brexit beyond 31 October.

Boris Johnson lost further grip on his government after his brother Jo resigned as an MP and minister. It comes after the prime minister’s attempt to call for snap elections in mid-October was defeated in parliament and MPs voted in favour of a bill to delay Brexit if no deal is reached by 19 October. 

2.00pm Melrose biggest riser, BHP biggest faller on FTSE 100

Melrose Industries PLC (LON:MRO) is the top riser on the FTSE 100 as it has held onto gains from earlier in the session after saying its turnaround of GKN remains on track to meet targets.

Nearly a year and a half after completing the hostile takeover of engineer GKN, the turnaround group generated £6.0bn of adjusted revenue in the six months to 30 June, double that of a year ago, while statutory revenue was also doubled to £5.7bn.

Shares are currently up 7% to 198p.

The biggest faller on the FTSE 100 is BHP Group PLC (LON:BHP) as its shares were trading ex-dividend. The company has asked shareholders to vote against a resolution to quit industry groups that lobby for policies inconsistent with the Paris climate change agreement.  

Shareholders, including the Church of England pension fund and the Australasian Centre for Corporate Responsibility (ACCR), proposed the resolution this week ahead of the company’s annual general meetings (AGMs).

ACCR has argued there was a clash between BHP’s “climate-aware positioning” and “the oppositional advocacy of its industry associations”, particularly in Australia where coal friendly positions have been taken by the Minerals Council of Australia and coal body Coal21.

1.15pm: Wall Street poised to open higher as US-China trade concerns fade

US stock futures rose after China’s Commerce Ministry said Beijing and Washington had set a tentative date of “early October” to resume trade talks.

Futures for the Dow Jones Industrial Average rose 260 points to 26,632 while S&P 500 futures gained 27 points to 2,965 and Nasdaq futures increased 96 points to 7,818.

A jobs report from the ADP on the private sector showed US employers added more jobs than expected in August. Employment rose by 195,000 last month, more than the 149,000 expected by analysts and the previous month’s addition of 156,000 jobs.

Investors are also awaiting the ISM’s non-manufacturing composite – a measure of activity in the services sector – due at 3pm following a poor reading on manufacturing earlier this week.

12.00pm: Boris Johnson’s brother quits as Tory MP and minister 

Boris Johnson’s brother has announced he is stepping down as a minister and an MP.

Jo Johnson, who voted Remain in the 2016 Brexit referendum, said in a tweet that he has been torn between family loyalty and national interest. 

The news has sent the pound up 0.66% to US$1.2334, its highest level since July. The FTSE 100 is now down 45 points to 7,265.

11.00am: Sterling boosted by Boris Johnson’s Commons defeat 

Sterling has strengthened as the risk of a no-deal Brexit on 31 October receded after Boris Johnson’s defeat in the House of Commons last night.

MPs voted in favour of a bill that requires the prime minister to ask the EU for an extension to the Brexit deadline if a deal is not agreed by 19 October. Johnson tabled a motion for a general election but failed to secure enough votes.

The pound is up 0.27% versus the dollar at US$1.2286 and 0.21% against the euro at €1.1126.

“Removing the immediate threat of a no-deal Brexit has helped the pound recover some of its recent weakness. If, as we expect, Brexit is delayed until January 2020 and an election is held after October, we would expect this recovery to continue. GBPUSD could rally above 1.30,” UBS analysts said.

“A deal could even bring it to 1.35. For EURGBP, the respective levels would be 0.87 or even the lower 0.80s.”

The analysts said a key risk to this view is an early general election in October and a victory for the Tories.

They said a no-deal Brexit could send cable toward US$1.15, or even lower, given the dollar’s recent strength, while euro/sterling could rise to £0.97.

10.00am: Boohoo shares jump after raising guidance 

Boohoo Group PLC (LON:BOO) shares have jumped 16% to 283p after raising its expectations for the year. 

Following stronger-than-expected revenue, the online fashion retailer now expects sales growth for the year to be between 33% and 38%, up from its previous forecast for an increase of 25% to 30%.

Liberum repeated a ‘buy’ rating on the shares and lifted its target price to 320p from 280p. 

“This is another impressive update from the group – over the past year we have already upgraded our FY20E PBT by 16% – where the multi-brand, multi-geography approach is working very well,” the broker said. 

“All the brands continue to gain share in their focus markets as Boohoo’s branded, fast-fashion, lowed-priced offer supported by its test-and-repeat model sits in a sweet spot that is driving strong growth across territories. “

9.00am: FTSE 100 opens lower

The FTSE 100 defied pre-market predictions and opened lower as traders shied away from pushing the blue-chip index towards a four-week high.

Perhaps it was the political uncertainty generated by another Commons defeat for Boris Johnson that applied the brakes.

However, the diminishing chance of a No Deal Brexit had the opposite effect on sterling, which is now back above US$1.22 after being below US$1.20 earlier this week.

The Financial Times called it a “humbling defeat” after MPs backed legislation to stop the UK leaving the EU without a deal and blocked the PM’s bid to call an election.

Away from this Westminster farce, China and the US moved closer to resuming talks aimed at mending trade relations.

This had a positive impact on Asia’s main markets, which failed to trickle through to London, which opened down 10 points at 7,301.06.

“On trade, we’re getting more jaw-jaw, but just as much war-war as before,” said Neil Wilson, analyst at Markets.com.

“The news of face-to-face high-level talks between the US and China next month has been seen as a positive but needs to be taken with a good dose of salt.

“It wasn’t that long ago the market was rallying as we thought a deal imminent, now it’s moving on nothing more than confirmation of talks. 

“It highlights the headline risk that traders must contend with and suggests there is very little by way of a strong trend in the markets right now, just a lot of short-termism and uncertainty. A trade deal is a long way away.”

On the stock market itself, there was a results-driven 6.6% rise for perennial laggard Melrose Industries (LON:MLRO), which led the Footsie.

Counter-balancing that were Micro Focus (LON:MCRO) and BHP (LON:BHP), which fell 3.3% and 3% respectively after they both started trading without entitlement to a dividend payment.

Stepping down a division, Clydesdale Bank owner CYBG (LON:CYBG) continued to be battered by Wednesday’s announcement of further payment protection claims following the August 31 rush, which appeared to shock the market. The stock fell a further 19%.

On the up was Future (LON:FUTR). Its shares advanced 11% after the media group said its earnings were likely to exceed expectations.

Proactive news headlines:

Avation PLC (LON:AVAP) ended its financial year flying high with results revealing the aircraft leasing company achieved both record revenues and profits.

Kibo Energy PLC (LON:KIBO) has inked key preliminary deals that significantly advance the proposed Benga power project in Mozambique.

Ceres Power Holdings PLC (LON:CWR) has completed development of a prototype range extender for Chinese electric buses with its partner, Weichai Power.

Curtis Banks PLC (LON:CBP) continued to grow sales, profits and the dividend in the first half of 2019, which it said demonstrated the resilience of the business amid headwinds in the self-invested person pension industry.

Location Sciences Group PLC (LON:LSAI) has signed up another data supplier to use its Verify location data verification platform. Blis, which uses big data to help brands target their adverts at particular groups and regions, will be the latest supply-side platform to use Location’s technology.

Genel Energy PLC (LON:GENL) shares started Thursday on the front foot as the Kurdistan oiler revealed that partner Chevron has inked a deal that envisages a 20,000 barrel per day crude processing facility at the Sarta field.

A fresh study has shown that Integumen PLC’s (LON:SKIN) Labskin technology can help cosmetic companies reduce development time, clinical errors and costs.

Columbus Energy Resources PLC (LON:CERP) told investors that work is continuing with partner Predator Oil & Gas to advance the CO₂ enhanced recovery pilot project in the Inniss-Trinity area, in Trinidad.  

TomCo Energy plc (LON:TOM) said it is ready to move onto what it calls the pre-commercial testing phase after an early-stage assessment of technology designed to unlock the hydrocarbon bounty from oil shale.

ClearStar Inc (LON:CLSU) has achieved a security accreditation for its information security, cybersecurity and privacy protection systems.

6.45am: FTSE 100 set for a solid start

The FTSE 100 looks set to nudge towards a four-week high on Thursday after MPs voted to block a no-deal Brexit and China and the US agreed to resume trade talks next month.

London’s blue-chip stock benchmark was pencilled in for a 25.8-point rise to 7,339.7, according to spread betters in the Square Mile.

The index has been slumped below the 7,400 mark since this time last month.

Overnight, the House of Common voted to push through a bill that would force the new Prime Minister to ask Brussels for a three-month delay to Britain’s exit from the European Union rather than leave without a divorce agreement. 

Boris Johnson’s call for an immediate snap election was blocked, with reports that the Labour party will only agree to hold a general election after 31 October and once the no-deal-blocking bill had passed into law.

Meanwhile, in Washington, officials were preparing to welcome counterparts from Beijing in early October, after China’s Ministry of Commerce agreed to reboot high-level trade talks.

These would be the first formal trade talks since July.

This news gave a lift to Wall Street stocks, with the Dow Jones index advancing 0.9% to 26,355.47, and further eclipsed by the broader S&P 500, which rose 1.1%, and the tech-heavy Nasdaq’s 1.3% climb. 

Asian stocks are in the green, led by Tokyo’s Nikkei 225 with a 2.4% rise, while the Shanghai Composite is up 1.6% and Hong Kong’s Hang Seng lags with a 0.2% gain.

Among Thursday’s company news, we are due to hear from Redrow Group PLC (LON:RDW) for the first time since the housebuilder’s half-year numbers in February, while almost a year and a half after winning the bitter battle to buy engineer GKN – but with disquiet still ringing in its ears – Melrose Industries PLC (LON:MRO) will post half-year results on Thursday.

Major announcements due on Thursday September 5:

FinalsAlumasc Group Plc (LON:ALU), Beeks Financial Cloud PLC (LON:BKS), Genus PLC (LON:GNS), Go-ahead PLC (LON:GOG), McBride plc (LON:MCB), Redrow plc (LON:RDW)

Interims: Curtis Banks PLC (LON:CBP), Enquest PLC (LON:ENQ), Gem Diamonds PLC (LON:GEMD), Melrose PLC (LON:MRO), Mpac Group PLC (LON:MPAC), Pphe Hotel Group PLC (LON:PPH)

Trading announcementsDixons Carphone Plc (LON:DC.)

FTSE 100 ex-dividendsBHP Group PLC (LON:BHP), Admiral Group PLC (LON:ADM), CRH PLC (LON:CRH), Flutter Entertainment PLC (LON:FLTR), Micro Focus International PLC (LON:MCRO), RSA Insurance PLC (LON:RSA), Land SecuritiesPLC (LON:LAND), Glencore PLC (LON:GLEN)

Economic data: US weekly jobless claims, ADP US employment change, Markit US services PMI, US factory and durable goods orders, ISM US non-manufacturing composite