Europe: Stocks, banks gain after Brexit deal defeat while UK shares lag

[LONDON] British shares lagged Europe slightly on Wednesday after Prime Minister Theresa May's resounding defeat in a parliamentary vote on her Brexit deal, but in the face of continuing political uncertainty investors focused on results and M&A news.

A defeat had largely been priced in already, though its magnitude came as a surprise.

Analysts and investors interpreted the outcome as a positive for the market, making a "softer, later" Brexit more likely, but uncertainty ahead of a no confidence vote in Mrs May's government on Wednesday evening kept trading muted.

The FTSE 100 was down 0.3 per cent by 0825 GMT while euro zone stocks climbed 0.2 per cent.

The top British index was dragged down by multinational exporter stocks like Unilever and Diageo, which make the lion's share of their earnings in foreign currencies and were bruised by sterling rising.

Bank shares were the biggest boost to European indexes as investors bet that a disruptive no-deal Brexit was less likely after the parliamentary vote.

On the corporate front, results and dealmaking news drove moves with stocks shrugging off the political developments of the night.

REUTERS