September 24, 2019 / 10:02 AM / 3 months ago

Pound rallies, stocks slip on UK Supreme Court ruling

FILE PHOTO: Pound coins are seen in this photo illustration taken in Manchester, Britain September 6, 2017. REUTERS/Phil Noble/File Photo

LONDON (Reuters) - Sterling extended gains on Tuesday while eurozone stocks tumbled after Britain’s Supreme Court ruled that British Prime Minister Boris Johnson had acted unlawfully when he advised Queen Elizabeth to suspend Parliament this month.

The British currency gained as much as nearly 0.5% on the day to $1.2491 GBP=D3 after the ruling while stocks .FTSE tumbled on the back of a stronger pound. Against the euro EURGBP=D3, the pound rose 0.3% on the day to 88.06 pence.

British gilt yields rose following the decision, dragging safe-haven German bond yields DE10YT=RR higher.

British government bond futures FLGcv1 fell to a session low of 133.12, down 60 ticks on the day, while 10-year gilt yields GB10YT=RR rose 3 basis points on the day to 0.585%.

“This is a win for the pro-remain side and suggests it will be harder for the government to push a no-deal brexit before the end of October,” said Chris Graham, senior economist at Standard Chartered Bank in London.

London's blue-chip FTSE 100 .FTSE hit its day low as sterling rallied after the ruling. A JPMorgan's index tracking UK stocks .JPDEUKDM> that make their revenue at home hit their day highs on the news.

Reporting by London Markets Team; Writing by Saikat Chatterjee; Editing by Dhara Ranasinghe

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