European markets were mixed on Tuesday, as investors wait for U.K. Prime Minister Theresa May’s revised Brexit deal to be accepted or rejected by parliament.
The FTSE 100 was initially under pressure, after the pound maintained its recent optimistic rally, but evened out later after the pound fell.
How did markets perform?
The Stoxx Europe 600
After an initial gain, sterling fell midmorning on news that might reduce U.K. Prime Minister Theresa May’s chances in a key Brexit vote due today. That in turn eased early pressure on the FTSE 100
The U.K. market can move inversely to sterling, because a strong pound hurts big U.K. firms that make most of their earnings in foreign currency.
What’s driving the markets?
May’s Brexit deal faces a second parliamentary vote on Tuesday, after talks with EU officials resulted in a revised agreement on Monday. However, there is skepticism over whether May’s revised deal will get through today’s vote.
“One feels right now that it won’t be enough to persuade Brexiteer MPs to budge as the text seems well caveated in favor of the EU. Comments from Labour leader Jeremy Corbyn haven't been encouraging for May to secure the majority she needs,” Neil Wilson, chief markets analyst for Markets.com told clients in a note.
On Tuesday morning, the U.K. government’s Attorney General published legal advice saying that the concessions don’t make the material changes Brexit-backers wanted; a heavy blow to May’s hopes. Sterling fell sharply on the news, reversing its early gains.
“Defeat for the bill is expected to pave the way for MPs to vote on a no-deal Brexit and a possible extension of Article 50. For now, the only thing which remains certain is that without fresh legislation, the default position is for the U.K. to leave the EU without a deal in a little over two weeks’ time,” Russ Mould investment director at AJ Bell, told clients in a note.
What stocks are active?
Ryanair Holdings PLC rose by 1.8%, after its share price took a hit on Monday after a Boeing Co.
Meanwhile, G4S PLC lost 3.3% after the security company announced its pretax profit plunged 63% in 2018 after a costly lawsuit in California hit its balance sheet.
Heavyweight pharmaceutical companies were also down, with AstraZeneca PLC