On September 24, 2019, the Supreme Court of the UK delivered a historic ruling regarding suspension of Parliament. Prime Minister Boris Johnson’s decision to shut down the House of Commons for five weeks in the run-up to the withdrawal from the EU was unlawful, the Apex Court of the UK ruled on Tuesday in a humiliating reproach to him.
The consensus decision by the 11 judges of the Supreme Court puts the UK’s withdrawal from the European Union in jeopardy as it provides parliamentarians with opportunity to challenge PM Johnson’s plan.
Meanwhile, an intransigent PM Johnson hit back at the top judges of the Supreme Court and affirmed to take Britain out the EU bloc on the scheduled departure date, October 31, 2019, despite witnessing an unusual legal vanquishing over the withdrawal strategy in the apex court of the land.
In the historic judgement, the Supreme Court said that PM Johnson gave unlawful advice to Queen Elizabeth II to suspend the British Parliament for five weeks and prevented the UK's elected parliamentarians from carrying on with their duties.
Prime Minister Boris Johnson said that he respects the verdict but retaliated immediately and said that "I firmly disagree with what the judged have found and I don't think that it's right but will move ahead and of course Parliament will come back."
John Bercow, the Speaker of the British Parliament, said, "I welcome the decision taken by juries that suspension of Parliament was unlawful."
Post the verdict, which rebuked PM Johnson for suspension of the House of Commons, the Prime Minister said that he is determined to deliver Brexit on the scheduled departure date, whatever the costs the country is going to bear, even if it means an exit without any formal agreement with the European Union to cushion the blow. He also added that the claimants in this scenario are firmed up to frustrate that and to stop that.
Also more political roadblocks could come ahead, as PM Johnson’s supporters have intimidated to ignore the new law that was positioned timely to prevent the UK from a no-deal Britain’s withdrawal from the EU bloc by forcing PM to seek another Brexit extension by October 19, in case he is unable to negotiate an agreement with the European Union lawmakers.
However, British Parliamentarians are set to meet before that PM has planned, there will be a number of potential opportunities for the British lawmakers to tie Johnson’s hand and alter the shape of Britain’s divorce from the EU bloc.
Supreme Court Verdict Extended losses of FTSE 100 stocks, and Sterling rose against USD and EUR.
Post the historic judgment by 11 juries, which ruled PM Johnson’s suspension of British Parliament unlawful, pushed FTSE 100 stocks lower as Sterling surged in the wake of weakening chances of a no-deal Brexit. Sterling traded 0.44% higher against the US Dollar at &$1.2486 and touched a high of 1.2488 in the September 24, 2019, market session. This reversal in the sterling sent FTSE 100 stocks lower. London's FTSE 100 index represents a portfolio of 100 large listed corporations as per their market capitalisation. Also, the majority of these companies earns their large chunk of revenue from the foreign markets and mostly from the United States. It means that they earn in Dollars and then convert it to pound, a weaker sterling against the US Dollars boosts their top-line and profitability as well. That’s why FTSE 100 stock surges whenever Sterling gets weakened against the Dollar. But, yesterday’s move from the apex court of the UK, reduces chances of a disorderly Brexit to a considerable extent, which helped Sterling to pare losses it had accumulated in the past couple of trading sessions, which lead to a decline in the FTSE 100 stocks.
The broader benchmark index of the London Stock Exchange (LSE) started the September 24, trading session from 7,326.65, touched a high of 7,349.97, low of 7,281.91 before it closed the session at 7,291.43, which was approximately 34.65 points or 0.44% lower against its respective previous closing level. Basic Materials, Energy and Financials were the top laggards of the day and declined by 1.51%, 1.51% and 0.52% respectively.
Also, at the time of writing (as on September 25, 2019, at 11:05 AM GMT), the FTSE 100 was trading 66.41 points or 0.91% lower against the previous closing level, with every FTSE 100 sector trading in red. Consumer Cyclicals, Technology and Financials were the top laggards giving up 1.52%, 1.50% and 1.32% respectively against their previous closing levels.
Travel and Leisure company Tui AG (LSE: TUI), Electronic & Electrical Equipment manufacturer Halma PLC (LSE: HLMA) and Food & Drug Retailer Ocado Group PLC (OCDO) were the worst performing FTSE 100 stocks at the LSE and plummeted by 5.96%, 3.73% and 3.32% respectively.
Mark Haefele, from UBS Global Wealth Management, said, that, "estimating an ultimate outcome of the UK divorce from the EU bloc is difficult, which reflects that the longer-term risk-return outlook for UK stocks is unpredictable."
Other benchmark indices in the UK, the FTSE 250 and FTSE 350 indices also plunged substantially on September 25, 2019 and at the time of writing (at 11:05 AM GMT, before the market close), the FTSE 250 index had given up 210.80 points or 1.06% at 19,708.27 and the FTSE 350 index slumped 37.99 points or 0.93% to 4,027.99.
However, stocks are plunging globally amid US lawmakers asking for an impeachment inquiry against US President Donald Trump, which is heightening political tensions. This move by Democrats upped tensions in the market which were already high over fears of global recession and the U.S.-China trade war.
Meanwhile, Sterling also pared gains it bagged in the yesterday’s trading session and at the time of writing (as on September 25, 2019, at 11:05 AM GMT) quoted 0.42% lower against the US Dollar at $1.2435 and gave up 0.22% against the Euro at €1.1304.
However, forex analysts estimating for some recovery in the Sterling amid slightly remote chances of a no-deal Brexit.
With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities.
Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?
Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.
We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.