FTSE heads back toward record, banks a drag on European stocks

By | June 1, 2017

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015.  REUTERS/Suzanne Plunkett/File photo

Strength in bluechip exporters helped the UK’s benchmark index inch back towards an all-time high on Thursday and outperform broader European markets where weakness in banks weighed.

Euro zone stocks rose 0.2 percent. The FTSE 100, meanwhile, was up 0.5 percent, just shy of a record high it hit in the previous session.

UK-listed multi-national firms, which dominate the benchmark index, are big beneficiaries of sterling weakness. The pound has been under pressure over the past week as some opinion polls point to a tighter-than-expected race in next week’s general election.

Firms such AstraZeneca and Rolls Royce, which get most of their revenues from outside the UK, were up more than 1.5 percent on Thursday.

Shares of Spanish bank Banco Popular fell more than 8 percent, the worst performers on the day, after one of Europe’s top bank watchdogs warned European Union officials that the bank may need to be wound down if it fails to find a buyer.

Among the larger banks, Deutsche Bank and Credit Agricole fell about 1 percent. Overnight, U.S. bellwethers JPMorgan and Bank of America both warned of weak trading revenues in the second quarter which pulled banking stocks sharply lower on Wall Street.

Shares of BT Group fell about 1 percent following a downgrade at Morgan Stanley which raised concerns over the company’s cash flows.

On the flipside, shares of online car retailer Auto Trader were the best performers on the STOXX 600 after Barclays upgraded the stock to an “overweight.” Shares jumped 6.4 percent to a record high.

Satellite group Inmarsat rose 5.8 percent with traders attributing gains to reports than Japan’s Softbank was in talks with the firm on a possible tie-up.

[Source:- Reuters]