LONDON, Oct 15 — Britain’s domestically focused mid-cap index advanced today amid hopes that a Brexit deal could be clinched this week, though gains were capped by steep falls in the shares of a slew of companies as the latest earnings season kicked off.
The FTSE 250, which had surged more than four per cent last Friday after positive Brexit signals from Ireland, added 0.3 per cent by 0800 GMT.
JP Morgan’s UK domestic plays index, which tracks about 30 UK stocks that make all or most of their revenue at home, rose one per cent. The index has gained more than 10 per cent since September.
The FTSE 100 also inched 0.2 per cent higher, helped by domestic banks such as Lloyds, and stocks considered most sensitive to any Brexit fallout such as housebuilders and consumer goods firms.
Britain and the European Union are set for crunch Brexit talks at a summit on Thursday and Friday, with Prime Minister Boris Johnson intent on delivering Brexit on October 31 and the EU still looking for further concessions.
“Last week’s observation that watching from the sidelines could be the smartest investment strategy of the year, probably still holds water this week,” Oanda analyst Jeffrey Halley said.
Initial optimism surrounding US-China trade was tempered and traders looked for more concrete details to assess any progress the countries had made last week to end their spat.
Any prospect of a rally among mid-caps was quelled, as downbeat trading updates led pub operator Marston’s, industrial process furnace and ovens maker Vesuvius and engineering group Renishaw eight per cent to 10 per cent lower.
Marston’s warned on its annual profit, while Vesuvius and Renishaw pointed to tough market conditions hitting their financials.
Indivior, whose shares have more than halved in value this year, jumped 12 per cent after the drugmaker raised its annual sales and profit view.
However, Woodford Patient Capital Trust tumbled seven per cent to a fresh record low after the corporate director of money manager Neil Woodford’s suspended LF Woodford Equity Income Fund said the fund is to be wound up.
“The career of Neil Woodford as stock-picker par excellence has come to an ignominious end,” Markets.com analyst Neil Wilson said.
Ryan Hughes, head of active portfolios at AJ Bell, said it was highly unlikely that Woodford would remain manager of WPCT.
Recruiter Hays was a bright spot, jumping 6 per cent as strong hiring in the US and China offset a drop in the United Kingdom. — Reuters
