September 26, 2018 / 9:27 AM / in 24 days

Britain's FTSE steadies near 3-week highs; Boohoo jumps

LONDON, Sept 26 (Reuters) - Britain’s top stock index held near a three-week high on Wednesday as investors took profits into a recent rally in oil majors after crude prices hit a four-year high, while retailer Boohoo jumped after a strong set of earnings.

The FTSE 100 was broadly flat at 0840 GMT, as European markets lacked a clear direction ahead of a widely expected rate hike from the U.S. Federal Reserve later on Wednesday.

Boohoo shares jumped 9 percent after the company raised its full-year sales forecast and first half profit increased 22 percent.

Connor Campbell, analyst at Spreadex, said a decline in mining stocks and profit taking in oil majors prevented the FTSE from making substantial gains above the 7,500 points mark.

Miners Randgold Resources and Fresnillo were the leading FTSE losers, both down more than 2 percent.

Concerns over the progress of Brexit negotiations dogged sentiment with British carmakers triggering some contingency plans by certifying models in Europe.

British stocks, however, remained supported among value-hunters because of their relatively cheap valuations compared to other major equity markets.

At around 4 percent, Britain offers a higher dividend yield than markets such as Europe and the United States.

On a valuation basis, the 12-month forward price-earnings multiple is 13 percent below global equities while the price-to-book ratio for the index is about a fifth below its long term average, according to Thomson Reuters data.

“These valuations chime with positioning data that show the UK to be somewhat of a consensus underweight,” said Mark Richards, a global multi-asset strategist at JP Morgan Asset Management in London.

As few as 630 UK-based finance jobs have been shifted or created overseas with just six months to go before Brexit, a far lower total than banks said could move after Britain’s surprise vote to leave the European Union, according to a Reuters survey. (Reporting by Saikat Chatterjee; Editing by Toby Chopra)

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