MILAN (Reuters) - Credit Suisse Wealth Management cut their view on British equities to “underperform” saying earnings momentum has likely peaked and that the lower likelihood of a “hard” Brexit would see a firmer sterling and weigh on exporter earnings.
“With a hard Brexit looking less likely, a potential reversal of the recent GBP weakness could weigh on UK equities going forward as it remains one of the most important drivers of the relative performance,” the Swiss bank’s wealth management said in a note.
UK's blue chips FTSE 100 index .FTSE has risen around 27 percent since the lows it hit following a referendum last year when Britons voted for their country to leave the European Union.
Those gains have largely been driven by a weaker sterling which makes the large chunk of offshore profits of UK bluechips more valuable.
Reporting by Danilo Masoni, Editing by Vikram Subhedar