Stocks rally as British MPs vote for Brexit delay
Stocks rallied in Europe after the UK Parliament backed the latest plan put forward by Prime Minister Theresa May, this time to delay leaving the European Union.
The British Prime Minister has proposed asking the European Union to extend the Brexit deadline from the end of March to the end of June.
NAB’s Ray Attrill said the motion authorised the Government to request two things of the EU.
“One is a short extension of Article 50 (through no later than June) in the event that at the third time of asking (next week) PM May manages to secure parliamentary support for her withdrawal agreement,” he wrote in a note.
“The second, if this fails, is that the Government would seek a lengthier extension — to allow for the formulation of a new Brexit strategy — with an understanding this would likely mean the UK having to participate in EU elections scheduled for late May.”
A European Commission spokesman said it was up to European leaders to consider any request to delay Brexit.
The FT 100 stock index in London put on 0.4 per cent to 7,185.
However, after a brief rally, the pound ultimately fell against the greenback.
“Our view is that there is still plenty of upside potential for the pound from here, but still just enough uncertainty around for there to be no rush to fully price in either a soft Brexit (and quite conceivably softer than implied by May’s own withdrawal agreement) or indeed no Brexit,” said Mr Attrill.
“This is in part since the tail risks of an eventual no-deal Brexit and/or a snap general election, still cannot be completely eliminated.”
US stocks were fairly flat on a report that a meeting between the US and Chinese leaders to end the trade war was not likely to take place until next month.
US President Donald Trump said he was in no rush to make a deal with China.
The S&P 500 index was up and down in light trade after rising nearly 3 per cent this week.
At 8:00am (AEDT) the Dow Jones index was flat at 25,710.
In futures trade locally, the ASX SPI 200 index was up 0.3 per cent to 6,203.
Brent crude oil was trading at $US67.19 a barrel.
Spot gold fell 1 per cent to $US1,296 an ounce as fears of a no-deal Brexit eased.
The Australian dollar was a touch weaker on a stronger greenback at 70.65 US cents.