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Banks lead FTSE higher on soft Brexit hopes

Banks lead FTSE higher on soft Brexit hopes

by Daniel Grote Oct 10, 2017 at 10:43

 

Banks have led the FTSE 100 higher after analysts at Credit Suisse said the sector would benefit from the government's likely move to a 'soft' Brexit.

The UK blue-chip index edged 11 points higher to 7,520, with Royal Bank of Scotland (RBS) among the risers, up 1.3% at 275.6p after Credit Suisse upgraded the stock to 'outperform'.

'We think investor sentiment towards UK domestic bank stocks should improve over the next 12 months as a soft Brexit becomes more likely,' they said, according to Reuters.

'Our central scenario of low growth, low unemployment and moderate rate rises is supportive for domestic banks' capital generation and we believe earnings risk is to the upside.'

The analysts also upgraded Lloyds (LLOY) to 'neutral'. The shares were up 0.6% at 67p.

On the FTSE 250, shares in Domino's Pizza (DOM) soared 14.5% to 346.2p on news of a an 8.1% jump in like-for-like third quarter UK sales.

Steve Clayton, who holds the stock in his HL Select UK Growth Shares and UK Income Shares funds, said the performance was 'well ahead of what most analysts were expecting from the group'.

'No surprise then to see the stock performing strongly this morning as the bears who held sway earlier this year got roasted in the pizza oven,' he said.

'Domino's are winning market share in the pizza delivery sector, not least due to the strength of their online ordering platform, which saw online sales in the UK rise 17.4%.'

Pets at Home (PETSP) was meanwhile a heavy 'mid-cap' faller, down 7.6% at 199.7p, after private equity investor Kohlberg Kravis Roberts & Co sold a 12.2% stake in the business.

Among 'small-cap' stocks, shares in Robert Walters (RWA) jumped 8.1% to 589.5p after the recruitment firm raised full-year profit forecasts.

The pound continued to claw back some of last week's losses against the dollar, up 0.5% at $1.32, while the euro inched lower to 89.3p.

 

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Comments  (4)

  • Alan Anderson: 

    Yawn. 'Soft Brexit' = Not Leaving.

    16:07 on 10 October 2017

  • Alan Tonks: 

    Shall we call a spade a spade, not very usual in this PC twisted age!!

    A soft Brexit is really a sell-out, which comes as no surprise whatsoever, with the gutless wonders in power.

    I do not think Br ever had exit in it, but I do think it has made a lot of ve**in in the know a heap of money and will continue to do so!!

    I would walk away from the table and regain our sovereignty without paying a penny.

    After all the EU isn’t exactly the most upstanding entity, far from it!!

    18:02 on 10 October 2017

  • an elder one: 

    In that event, it's not so much a brexit as a ballsup.

    God! we went through this lot, only the other day; can we not find something more entertaining to play with.

    B....r the banks; time they woke up to the facts of life.

    Agreed Alan!

    18:43 on 10 October 2017

  • an elder one: 

    I don't hold any UK banks, but others in etfs in eastern parts

    18:47 on 10 October 2017

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