TRADERS appeared to have a spring in their step on Wednesday, as the drama in Westminster gave markets a sense that a no-deal Brexit was looking less likely.
The FTSE 100 closed up 43.07 points at 7,311.26 and the pound also rose against the dollar, recovering much of the ground lost on Tuesday when it hit levels not seen since the 1980s.
A pound is now worth $1.2189, up 0.86%. Against the euro the pound was up by 0.37% at €1.1053.
The markets were also cheered by Hong Kong chief executive Carrie Lam's decision to scrap a controversial extradition treaty to mainland China, which had been the subject of relentless protests.
Even talk of a UK recession, as the latest PMI survey for the services sector revealed one is on the cards, markets held up.
This was helped by strong PMIs in China and the Bank of England governor, Mark Carney, saying a no-deal Brexit will not be as severe as first thought.
Connor Campbell at SpreadEx said: "In quite the reversal from Tuesday's 34-year lows - and brushing off a poor services PMI - Parliament's attempts to avert a no-deal Brexit have put a spring in the step of the pound.
"That this comes despite the still present threat of a general election shows just how desperate the currency is to avoid Britain crashing out of the EU without an agreement in place - some uncertainties, after all, are more palatable than others."
In company news, Royal Bank of Scotland has warned it could be hit for an extra £900 million for PPI misselling after a last-minute surge in claims ahead of the August deadline. Shares closed up 0.1p at 184.05p.
Homewares chain Dunelm Group unveiled surging profits and greater market share, but investors remained cautious on the future. Even a special dividend of 32p a share, on top of a final dividend of 20.5p was not enough to save the shares from falling 81p to 799.5p.
Housebuilding giant Barratt Developments defied property market worries to deliver another set of record annual profits, 8.9% to £909.8 million for the year to June 30 after house sales reached an 11-year high.
But, again, fears for the economic future weighed heavily, and shares closed down 22.4p at 599.6p.
Halfords warned that summer sales were weaker than expected after the bikes and car maintenance chain was struck by poor weather and weaker consumer confidence. Shares fell 3p to 169.3p.
And finally, in better news, pub group Fuller's said it will dish out £69 million to shareholders after completing the £250 million sale of its brewery arm to Japan's Asahi earlier this year. Shares jumped 90p to 1,200p.
The biggest risers on the FTSE 100 were Prudential up 48.5p to 1,397.5p, Marks & Spencer up 6.35p to 193.1p, Antofagasta up 27.2p to 860.8p and DS Smith up 10p to 339.7p.
The biggest fallers on the FTSE 100 were Barratt Developments down 22.4p to 599.6p, Admiral Group down 34p to 2,095p, Berkeley Group down 48p to 3,834p and Ocado Group down 12p to 1,332p.
Bosses at the London Stock Exchange also formally confirmed that from Thursday, Hikma Pharmaceuticals, Meggitt and Polymetal International will join the FTSE 100 and Direct Line, Marks & Spencer and Micro Focus are demoted to the FTSE 250.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here