Market Report: Rush for Brexit bargains pushes FTSE 100 to year-high

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The FTSE 100 hit its highest level since May last year after a Brexit-induced sterling slump caused investors to pile into equities.

The blue-chip index advanced 67.85 points, or 1%, to 6967.18 as Prime Minister Theresa May confirmed the process to quit the European Union would begin at the end of March.

“Although markets welcome the update, there is still a great degree of uncertainty surrounding what Brexit negotiations will involve,” said Ana Thaker, market economist at PhillipCapital.

Banking shares took a break from the wild swings caused by speculation about Deutsche Bank’s future as the German lender’s shares were not trading today because of a public holiday. 

Friday saw Deutsche’s shares move 15% in the space of a few hours as chief executive John Cryan reassured about the strength of the bank’s balance sheet.

Today, Royal Bank of Scotland, which is also awaiting a huge fine from the US Department of Justice for selling mortgage-backed securities before the financial crisis, was marginally higher at 178.9p. 

Lloyds Banking Group was 0.3p better off at 54.85p and Barclays 0.25p up at 168.05p.

Heavyweight oil shares played their part in the Footsie’s rally as the price of Brent crude passed $50 a barrel, continuing from last week’s rise as Opec confirmed plans for a production cut to end the global oil glut.

Royal Dutch Shell, the UK’s largest listed company by market value, improved 50.51p, or 2.5%, to 2047.51p and BP rose 7p to 457p.

Fund managers were on the rise after Henderson’s $6 billion tie-up with Janus Capital, with Schroders up 62p, or 2.3%, at 2758p and mid-cap players also advancing. Aberdeen Asset Management improved 14.3p to 340.6p and Jupiter Fund Management leapt 18.1p to 443.5p.

Financial services giant Legal & General missed out on the sector’s rally, sliding 1.5p to 217.2p as JPMorgan Cazenove warned of slowing cash generation and urged investors to steer clear of the shares. The broker slashed its forecasts for 2018 by 10%.


Brexit fears: X Factor broadcaster ITV could be the biggest loser of its sector (Thames / Syco Entertainment)

Investors tuned out of ITV, which fell 3.2p to 184p, as Barclays warned it would be the worst hit of the European free-to air broadcasters in the wake of Brexit.

The oil price rise lifted North Sea engineer Weir by 40p to 1740p as it welcomed John Heasley as its new chief financial officer.

On the junior market, investors in troubled Stanley Gibbons were left licking their wounds again as the AIM-listed stamp-collecting firm swung to an annual pre-tax loss of £28.9 million.

Sources said the company, which lost 1.25p to 11.75p, is in talks to sell off non-core parts of the business.

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October 3, 2016 |
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