LONDON (Reuters) - UK shares eased slightly on Monday but outperformed Europe as relative calm returned after last week’s tumult and Prime Minister Theresa May continued to fight for support for her Brexit deal.
The FTSE 100 .FTSE fell 0.2 percent, giving up opening gains, but strength in the financial and mining sectors helped the index outperform a 0.7 percent slide in Europe STOXX.
“Things are a bit calmer and there’s not been anything particularly exciting bearing in mind that end of last week,” said Mike van Dulken, head of research at Accendo Markets.
A rout in Renault shares after its chief executive Carlos Ghosn was arrested in Japan on suspicion of under-reporting his salary cast a pall over France’s CAC 40.
With the earnings season drawing to a close, UK investors focussed on politics as May vowed to fight on to gather support for her draft European Union divorce deal as dissenters in her own party scrambled to trigger a leadership challenge.
“May might have overcome the issue of no confidence vote and that adds an element of certainty and may mean we’re looking at a deal rather than a no deal and businesses like certainty,” said van Dulken.
Miners .FTNMX1770 also provided support, adding 0.6 percent.
But the gains were more than offset by a slump in energy shares as the session drew to a close, as several investors remained cautious over the outlook for Brexit.
“Some of the stocks that were brutalised the most haven’t really bounced, so there’s no big UK relief if you look at what’s happening on the FTSE today,” said Eric Moore, income fund manager at Miton.
Housebuilders continued to get bulldozed after data from real estate website RightMove showed UK house prices in October fell year on year for the first time since 2011.
Last week, the sector was one of the hardest hit by the chaos over Brexit with investors worrying about the impact of a possible second referendum, general election or hard Brexit on the British economy.
Among the midcaps, Diploma (DPLM.L) jumped 4.2 percent to the top of the board as investors cheered better-than-expected full-year results.
Intermediate (ICP.L) extended last week’s gains triggered by earnings after a positive note from JPMorgan.
Reporting by Josephine Mason and Danilo Masoni; additional reporting by Helen Reid; Editing by Janet Lawrence