Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE relatively stable as Brexit impasse has mixed impact

Published 15/10/2018, 09:57
Updated 15/10/2018, 10:00
© Reuters. FILE PHOTO - Traders looks at financial information on computer screens on the IG Index trading floor

© Reuters. FILE PHOTO - Traders looks at financial information on computer screens on the IG Index trading floor

By Danilo Masoni

MILAN (Reuters) - Britain's top share index was steady on Monday as a deadlock in Brexit talks depressed domestic stocks but helped internationally focussed companies as it weakened the pound.

The FTSE 100 (FTSE) was down 0.1 percent by 0813 GMT, while the domestically focussed midcap index (FTMC) fell 0.7 percent, further hit by warnings from ConvaTec and Superdry.

The FTSE outperformed the pan-European STOXX 600 index (STOXX), which declined 0.4 percent.

"Thanks to the situation with sterling, the FTSE ended up being one of the better performers," said Connor Campbell, analyst at Spreadex.com.

The stubborn problem of Britain's land border with Ireland thwarted a drive to clinch a Brexit deal before a European Union summit this week, as negotiators admitted defeat after marathon talks and pressed pause for the coming days.

"Any delay or disagreement only heightens the chances of a no-deal Brexit, hence the pound’s red headache," added Campbell.

Shares in big international firms such as British American Tobacco (L:BATS), Shire (L:SHP) and Unilever (L:ULVR), as well as oil majors, which tracked rising crude prices, provided the biggest boost to the FTSE.

Shares in precious metal miners Randgold Resources (L:RRS) and Fresnillo (L:FRES) also rose, up 3.6 and 2.1 percent respectively, as gold prices hit a near 12-week high.

Among companies with bigger exposure to the domestic economy, banks Lloyds (L:LLOY) and Royal Bank of Scotland (L:RBS) fell 1.2 and 0.7 percent respectively, while house builders Derwent (L:DLN) and Persimmon (L:PSN) dropped by around 1 percent.

Analysts expect a no-deal scenario to lead to a significant downward revision to Britain's economic growth, with sterling likely to fall further under such a scenario.

Among mid-caps, ConvaTec (L:CTEC) plunged 27 percent after the medical devices maker lowered its expectations for revenues and margins, citing a change in inventory policy by its largest customer in its Infusion Devices business.

Fashion group Superdry (L:SDRY) warned 2018-19 profit could be as much as 17 percent below current expectations, blaming a hit to sales from unseasonably hot weather and rising foreign exchange costs. Its shares tumbled 17.7 percent.

© Reuters. FILE PHOTO - Traders looks at financial information on computer screens on the IG Index trading floor

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.