UK-focused shares cheer potential further Brexit delay

The London Stock Exchange Group offices are seen in the City of London December 29, 2017. — Reuters pic
The London Stock Exchange Group offices are seen in the City of London December 29, 2017. — Reuters pic

LONDON, April 3 — The prospect of a further delay to Brexit pushed up London’s midcap index and more domestically exposed sectors including banks and homebuilders today, as it eased some fears of a disruptive no-deal departure.

The FTSE 250 bounced to a two-week high, climbing 0.6 per cent in its fifth straight session of gains, while the exporter-heavy FTSE 100 lagged its European peers as the pound firmed.

Prime Minister Theresa May, after seven hours of cabinet meetings yesterday, said she would seek another Brexit delay beyond April 12 to try to agree a European Union divorce deal with the opposition Labour leader.

Dublin’s main index, seen as a gauge of Brexit jitters, added 0.6 per cent on its fourth consecutive session of gains.

“None of this guarantees Britain won’t bumble out of the EU sans deal, especially given the frothing fury May’s cross-party olive branch has caused among the hard right of her Tory party. However, it is better than nothing,” said Spreadex Analyst Connor Campbell.

Although the default remained that Britain would leave the bloc without a deal, May’s move offered the prospect of keeping the UK in a much closer economic relationship with the EU after Brexit.

That boosted shares in housebuilders with blue-chips Persimmon, Taylor Wimpey and Barratt all rising between 2 and 3 per cent.

British banks including Royal Bank of Scotland, Lloyds and Barclays also thrived.

However, exporters felt the brunt of a stronger sterling and kept the main index in the red.

Burberry slipped 4.2 per cent to be the biggest blue-chip faller as JP Morgan analysts slashed annual core profit estimates for the luxury goods brand on Brexit-related sterling volatility.

Topping the FTSE 250 leaderboard was transport company Stagecoach that surged 11 per cent after it hiked its annual adjusted profit target on what it called “strong trading and positive progress” in the UK rail business.

The small-cap index saw some steep news-driven moves.

Superdry slumped another 12 per cent as the return of its co-founder and former boss Julian Dunkerton as interim CEO prompted the majority of its board members to step down on Tuesday.

CMC Markets slid 7 per cent to its lowest level on record as it forecast a plunge in net operating income for fiscal 2019 as new rules curbed client trading activity and announced the departure of its CFO.

Financial advisory firm Lighthouse surged 24.5 pct and was on course for its best day in nearly seven years after a 33 pence per share buyout offer from Quilter’s unit Intrinsic Financial. — Reuters

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