Pound, London stocks recover before UK budget, 'no deal' vote

Sterling has levelled out in Asia after swinging wildly on Tuesday, though analysts warn of more uncertainty ahead

The British pound and London stock market recovered Wednesday ahead of a budget update from the government and parliament's vote on whether to back a "no deal" Brexit.

Sterling and London share prices had taken a brief knock after MPs on Tuesday rejected for a second time a Brexit withdrawal deal negotiated by Prime Minister Theresa May, despite her obtaining last-minute assurances from EU officials.

Heading into midday on Wednesday, London's benchmark FTSE 100 index recovered to trade flat while the pound rebounded versus the dollar and euro.

"With the... budget presented ahead of tonight's vote on a 'no deal' Brexit, further volatility looks certain," said Joshua Mahony, senior market analyst at IG trading group.

"The pound has been the main area of volatility when reflecting Brexit developments, with the FTSE 100 remaining somewhat stable despite the constant shifts," he added.

Elsewhere Wednesday, eurozone stock markets traded mixed, while Asian indices closed lower.

The euro edged up against the dollar.

British MPs will Wednesday vote on whether the UK should leave the European Union without a deal in just over two weeks, after overwhelmingly rejecting the country's draft Brexit divorce agreement with Brussels.

The House of Commons is expected to vote against a "no deal" Brexit, although this could still happen on March 29 anyway unless the British parliament can agree on what should happen instead.

Meanwhile ahead of the "no deal" vote, finance minister Philip Hammond updates the government's spending and tax plans that depend heavily on the nature of Brexit.

Contained within the Spring Statement, an update on the main annual budget announcement last October, will be the government's latest forecasts for UK growth -- widely expected to be downgraded owing to Brexit uncertainty and global economic headwinds.

"Whilst Brexit continues to play out, traders will also glance across to the... budget," said Jasper Lawler, head of research at London Capital Group.

"Whilst Brexit will clearly overshadow the event there are a few nuggets of information that will be useful including new forecasts for economic growth and public finances."

- Key figures around 1130 GMT -

Pound/dollar: UP at $1.3152 from $1.3062 at 2100 GMT

Euro/pound: DOWN at 85.86 pence from 86.46 pence

Euro/dollar: UP at $1.1294 from $1.1292

Dollar/yen: UP at 111.34 yen from 111.29 yen

London - FTSE 100: FLAT at 7,150.92 points

Frankfurt - DAX 30: DOWN 0.1 percent at 11,518.68

Paris - CAC 40: UP 0.4 percent at 5,288.89

EURO STOXX 50: UP 0.3 percent at 3,313.13

Tokyo - Nikkei 225: DOWN 1.0 percent at 21,290.24 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 28,807.45 (close)

Shanghai - Composite: DOWN 1.1 percent at 3,026.95 (close)

New York - DOW: DOWN 0.4 percent at 25,554.66 (close)

Oil - Brent Crude: UP 37 cents at $67.04 per barrel

Oil - West Texas Intermediate: UP 57 cents at $57.44 per barrel

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