|Day's range||7,144.66 - 7,250.09|
|52-week range||6,536.50 - 7,727.50|
It is a big week ahead, with corporate earnings, trade talks, Brexit and economic data in focus. There’s also the IFM meetings and the EU Summit.
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(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.K. domestic stocks may shake off their pariah status as beaten-down banks, housebuilders and retailers would be the biggest winners if the U.K. and European Union agree a deal on Brexit before the U.K. is scheduled to leave the bloc on Oct. 31.After a red-letter day for U.K.-exposed stocks on Friday amid signs of progress in talks, all eyes turn to next week’s EU Summit. The U.K.’s FTSE 250 index closed the week 4.2% higher, posting its best day since May 2010.“If there was a Brexit deal, political uncertainty would be reduced, sterling would appreciate, and that would be naturally positive for U.K. domestics and negative for international companies,” Matthew Hall, portfolio manager at Allianz Global Investors, said in an interview, adding that housebuilders and U.K. banks should see the biggest gains.With a crucial few days ahead, here’s a roundup of some of the biggest stock-market winners -- and losers -- if a Brexit deal is clinched:U.K. BanksU.K. high street lenders have been among the stocks hardest hit by Brexit uncertainty, and analysts at Citigroup Inc. predicted in August that a no-deal scenario could cut their earnings by as much as 25%.Both Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc’s shares surged on Friday. RBS -- the “poster child” of no-deal risk fears, according to Bloomberg Intelligence’s Jonathan Tyce -- rallied as much as 16%, the most in almost a decade.Even after Friday’s jump, RBS shares are still down about 13% since the referendum, while Lloyds is down about 18%. A deal would clarify the risk around small and medium-size enterprise lending, Tyce said in a note, while also preventing a Labour victory in any potential election as well as further rate cuts by the Bank of England.U.K. MidcapsSmaller U.K. companies would also benefit from a deal. This summer saw a string of British companies warn of the impact Brexit will have on their businesses, including firms such as recruitment agency PageGroup Plc, car dealer Pendragon Plc and property firm Savills Plc, while Thomas Cook Group Plc, a stalwart of the travel world, went bankrupt.Among other FTSE 250 members, Dixons Carphone Plc and Card Factory Plc have been hit by the slowdown in spending weighing on Britain’s high street, and are down 70% and 51% respectively since the Brexit vote. The worst-performer in the Index, subprime lender Provident Financial, has shed more than 80% as more customers have struggled to repay while it grapples with U.K. regulatory probes into its lending practices.HomebuildersBritish housebuilders have been under pressure amid Brexit uncertainty and Morgan Stanley predicted last month that the group could gain 20% if a deal was reached, or drop 18% in a no-deal scenario.Crest Nicholson Holdings Plc, which focuses on London and the surrounding commuter areas, has plummeted 31% since the referendum, while FTSE 100 member Taylor Wimpey Plc, also with big operations in the capital, has dropped about 15%.“We believe Taylor Wimpey is best-placed amongst U.K. housebuilders to gain from a post-Brexit market bounce back,” HSBC Holdings Plc’s Brijesh Siya wrote Oct. 9, citing the company’s strategy of building large sites and its potential to cut costs.RetailersU.K. retailers have suffered as consumers curtailed spending amid uncertainty about how the economy would fare. The FTSE 350 General Retailers Index is down about 20% since the Brexit referendum.With more clarity, consumer and business confidence would both rise and the whole retail sector would benefit, Shore Capital analyst Clive Black said. Supermarkets would feel the impact of a stronger pound more quickly than non-food retailers, given they have shorter lead times on buying products from overseas, with Marks & Spencer Group Plc and Tesco Plc likely among the biggest beneficiaries.UtilitiesUtilities investors have been hoping to avoid a Jeremy Corbyn government. The Labour leader has vowed to nationalize swathes of Britain’s water and energy firms, along with the railways and postal group Royal Mail Plc.If a Brexit deal increases the Conservative Party’s chances of winning an election, that could be positive for the sector. RBC Europe analyst John Musk wrote last month that an election would be a chance to scrutinize Labour’s “unchecked rhetoric” on the sector.National Grid Plc and United Utilities Group Plc are among the utilities stocks to watch. They’re down 17% and 10% respectively since the 2016 vote.ExportersOn the other hand, if a deal is cemented, the resulting gain in the pound may negatively impact exporters to the U.S., which have benefited from the currency’s weakness against the dollar. Analysts at Morgan Stanley said in August that U.K. drugmakers GlaxoSmithKline Plc and AstraZeneca Plc would benefit from a no-deal scenario and could see their valuations lowered by 8% and 11%, respectively, if a deal is reached.A strong pound is also negative for Diageo Plc, which slumped as much as 4% on Friday. Every 1% move against the dollar is worth about 0.5% of the London-based beverage giant’s earnings per share, Jefferies analyst Ed Mundy said in an email.Other stocks to watch include British American Tobacco Plc, Reckitt Benckiser Group Plc and Victrex Plc.To contact the reporters on this story: Kit Rees in London at email@example.com;Joe Easton in London at firstname.lastname@example.org;Erin Roman in London at email@example.comTo contact the editors responsible for this story: Celeste Perri at firstname.lastname@example.org, Beth MellorFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- It’s that Friday feeling. The mood is turning decidedly upbeat in the market, with glimmers of hope for two sagas that have plagued European stocks this year -- trade talks and Brexit.As the week began, equities were coming off the worst slump since August, the trade war was heating up with the U.S. blacklisting Chinese tech giants, and U.K. Prime Minister Boris Johnson had deemed a Brexit agreement by the end of the month “essentially impossible.” Fast forward to Friday, and equities are poised for their biggest weekly rally since mid-March.The Stoxx Europe 600 Index traded 1.9% higher as of 4:02 p.m. CET, the biggest gain since January. Despite the rout at the start of October, the gauge is now less than 1% away from a one-year high reached last month. The coming days will confirm whether investors’ optimism is warranted, and provide catalysts for further stock market moves.“The slightest glimmer of hope literally gives the stock market wings and all worries and crises seem to have been forgotten,” Andreas Lipkow, strategist at Comdirect Bank, said by phone. “It remains to be seen if the very high expectations can be met. As after any big party, the headache on the following morning can be equally painful.”The gains were even more pronounced for U.K.-domestic stocks, boosted by hopes the U.K. may reach a deal with the EU on Brexit. The pound has been surging since Irish Premier Leo Varadkar said Thursday that he believed an agreement is possible by the Oct. 31 deadline, following two-and-a-half hours of “constructive” talks with Prime Minister Boris Johnson. On Friday, EU Chief Negotiator Michel Barnier recommended that detailed talks can begin in earnest.The FTSE 250 was up 3% on Friday, the most since July 2016, with Royal Bank of Scotland Group Plc jumping 16% and Marks & Spencer Group Plc climbing 11%. The FTSE 100, home of multinationals such as BP Plc and GlaxoSmithKine Plc, was only up 0.5%, hurt by the rally in the pound.“What we see today is mostly short-covering in cyclical sectors and financials,” said Markus Steinbeis, managing director at asset manager Steinbeis & Haecker in Munich, adding that the rally could last for a little while, given the attractive valuations and the significant underweight in these value stocks among investors.The September fund manager survey from Bank of America showed the U.K. has been the least-favored region by investors in terms of equity allocation globally. The poll showed that overall, a net 30% of fund managers said they were underweight U.K. stocks, 1.2 standard deviations below the long-term average.On the trade war front, the second day of U.S.-China negotiations kick off on Friday after U.S. President Donald Trump said the first day had gone “very well.” It’s the first senior-level in-person talks since late July to attempt to end an 18-month standoff. Trade-sensitive sectors including autos and miners were surging, with Volkswagen AG up 3.5%, Daimler AG up 2.5%, and ArcelorMittal up 4.8%.Uwe Becker, co-CIO of Shareholder Value Management, remained skeptical about the overall market rally, however. “The reason for this upward move is lacking the facts. We haven’t heard any details on trade talks or Brexit besides the comments that talks are ‘going well,’ hence the move lacks substance to me.”To contact the reporters on this story: Namitha Jagadeesh in London at email@example.com;Jan-Patrick Barnert in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Blaise Robinson at email@example.com, John ViljoenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
* Optimism on Brexit and the trade war drive stocks higher * STOXX up 1.7%, Irish stocks jump 3.7% outperforming rest of Europe * Publicis sinks after results, drags WPP down * Hugo Boss shares slump 11%, pulling down Burberry Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: firstname.lastname@example.org DIVERGING FORTUNES IN LUXURY (1256 GMT) Hugo Boss shares dropped more than 13% today hitting their lowest since December 2010 after the company's latest sales warning. The two companies highlight the polarisation in the luxury space, with some companies investing heavily on marketing and product design, while others, which lack the same firepower, struggling to compete, says Aneta Wynimko, a portfolio manager at Fidelity International, who leads a $1.3bn global equities consumer fund.
* Optimism on Brexit and the trade war drive stocks higher * STOXX up 1.7%, Irish stocks jump 4% outperforming rest of Europe * Publicis sinks after results, drags WPP down * Hugo Boss shares slump 11%, pulling down Burberry Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: email@example.com MILESTONES GALORE AS JOHNSON'S BREXIT BUS APPEARS ON COURSE (1244 GMT) Banks, retailers, housebuilders... oh wait it's easy this way, 85% of the constituents in the FTSE midcap index are rallying! And in the rest of Europe, DAX is indeed having its Oktoberfest rising 2%. ** The FTSE 250 index is poised for its best single-day gain in more than 3 years.
WeWork’s buildings in London’s Moorgate, Paddington, and Farringdon had combined revenues of £59.2m in 2018 and made a combined profit of £10.4m.
With its global profit stream and international exposure, the FTSE 100 (INDEXFTSE:UKX) should always outperform buy to let, argues Rupert Hargreaves.
Hopes that Britain will seal a Brexit deal saw unloved London-listed companies with exposure to the domestic economy rise more than blue-chip stocks on Friday, for the first time since May, in a major reversal of fortunes. JP Morgan's UK domestic plays index that tracks about 30 UK stocks that make all or most of their revenue at home soared almost 8% on Friday for its best day since the grouping was created nearly three years ago. The index outperformed the FTSE 100 by 4.4%, the only time since May that it has performed better.
Britain's mid-cap index surged nearly 2% on Friday as hopes grew that a Brexit deal may be clinched by the end of the month, while a rally in blue-chip financial stocks and housebuilders helped the FTSE 100 reverse earlier losses. The FTSE 250 jumped 1.9% and was on course for its best day since January by 0953 GMT. After nearly three years of chaotic negotiations, signs that a divorce deal could finally be nailed down were enough to push London-listed companies with exposure to the domestic economy to a premium over the FTSE 100 for the first time since May.
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Investors pounced on everything from banks like RBS to housebuilders and retailers such as Kingfisher , which owns DIY chain B&Q, after British Prime Minister Boris Johnson and his Irish counterpart, Leo Varadkar, said they had found "a pathway" to a possible Brexit deal. The buying spree targeted some of the market's most beaten-down stocks and those considered most vulnerable to a downturn in consumer spending if the country crashes out of the European Union without a deal.
British hedge fund manager Man Group said assets were hit by net outflows of client cash and adverse currency moves in the third quarter and an uncertain outlook could weigh on sentiment into year-end. With leading stock markets including the S&P 500, the EuroSTOXX 50 and Britain's FTSE 100 all trading sideways to lower over the period, Man Group funds betting on rising stock prices saw the biggest outflows, at $1.7 billion.
The FTSE 100 ended 0.3% higher, after flipping back and forth during the day on mixed signals over the state of affairs between Beijing and Washington, while the midcap index that has a greater UK exposure also rose by the same level. Spirits company Diageo , consumer goods giant Unilever and AstraZeneca were among stocks hammered the most, causing the FTSE 100 to lag other major indexes. Stocks vulnerable to a hit from Brexit, on the other hand, overpowered those losses.