Reuters logo
Britain's FTSE remains stuck under sterling pressure
November 30, 2017 / 9:57 AM / 13 days ago

Britain's FTSE remains stuck under sterling pressure

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* FTSE 100 down 0.2 pct

* Brexit optimism keeps sterling buoyant

* But puts pressure on UK dollar-earners

* Oil stocks fall ahead of OPEC meeting

By Kit Rees

LONDON, Nov 30 (Reuters) - The UK’s index of leading shares remained under pressure from a rise in sterling on the back of optimism over progress in Brexit talks, with the FTSE 100 set to end November with a slight loss.

Britain’s blue chip FTSE 100 index was 0.2 percent lower at 7,377.07 points by 0941 GMT, extending losses from the previous session when a breakthrough in Brexit talks sent sterling to more than a two-month high.

A report that Britain is close to a deal over the Northern Ireland border on Thursday added to the upbeat mood following Tuesday’s media reports that Britain had reached a deal with the European Union over the size of its Brexit divorce bill.

The British government, however, said that nothing had been finalised in talks with the European Union on leaving the bloc.

In 2016, the FTSE 100 gained more than 14 percent, thanks to a fall in sterling after the June Brexit vote. This gave an accounting boost to the blue chip constituents which generate revenues in dollars.

By contrast the FTSE 100 is on course for a more modest gain of just over 3 percent for 2017.

Jasper Lawler, head of research at London Capital Group, said that investors could be looking at mainland Europe as a place to park their money instead of UK equities.

“The natural assumption is that the stronger rate of economic growth that Europe is seeing gets translated into earnings for European companies, and it looks like their monetary policy is going to remain more accommodative for longer than in the UK,” Lawler said.

Elsewhere losses for energy stocks also weighed, with BP <BP.L and Royal Dutch Shell down around 0.8 percent ahead of an OPEC meeting at which producers are expected to extend a supply-cut deal.

Mediclinic and BAE Systems bucked the trend, however, with Mediclinic’s shares jumping 3.2 percent on the back of a double upgrade from Jefferies to “buy” from “underperform”.

“With the precipitous fall in the share price that overshot our prior PT (price target), we have reassessed our stance to understand if there is an opportunity for value,” analysts at Jefferies said in a note.

“A model revamp and re-analysing the UAE highlights significant value and creates a great buying opportunity.”

BAE Systems rose 2.2 percent after the defence firm said that it expected no material impact on its earnings from new accounting standards.

Elsewhere shares in newspaper publisher Daily Mail and General Trust plummeted more than 23 percent, on track for their biggest one-day drop in more than 20 years after the group reported a 13 percent drop in profit and a weak outlook.

Reporting by Kit Rees; Editing by Keith Weir

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below