Britain's FTSE heads for worst quarter since 2011

By Reuters / March 30, 2018 / in.investing.com / Article Link

(There will be no London-based FTSE report on Friday March 30 and Monday April 2 due to public holidays in the UK.)

* FTSE 100 up 0.4 pct

* FTSE set for worst quarter since 2011

* Cyclicals lead gains

By Kit Rees

LONDON, March 29 (Reuters) - A recovery in cyclical stocks boosted the UK's top share index on Thursday, set for a mildly upbeat end to the FTSE 100's worst quarter in nearly seven years.

The blue chip FTSE 100 .FTSE was up 0.4 percent at 7,072.42 points by 0900 GMT, while mid caps .FTMC gained 0.5 percent as traders prepared for a market holiday.

Gains in cyclical stocks, which are more dependent on the economic cycle, added the most points to the index. Shares in miners Anglo American AAL.L , BHP Billiton BLT.L and Glencore GLEN.L were among the biggest gainers, rising 1.5 percent to 2.4 percent as the underlying price of copper ticked higher.

However, the first quarter has been a bumpy ride for British stocks, marred by a spate of profit warnings, troubles in the retail and outsourcing sectors as Brexit uncertainty also hangs over the region's equities.

"There's been negative sentiment towards UK equities for a significant period now, stemming all the way back to the EU referendum,", Laith Khalaf, senior analyst at Hargreaves Lansdown (LON:HRGV), said.

"What we've had in 2018 is more of a global phenomenon, so we've have had a bit of volatility returning to markets," said Khalaf, adding that this is a more normal state of affairs for markets.

On the domestic front, high street stalwarts such as Debenhams DEB.L , Mothercare MTC.L and Moss Bros MOSB.L have all tumbled after profit warnings, examples of a tough environment for retailers struggling in a digital age.

The collapse of outsourcer Carillion CLLN.L has further dented confidence in UK domestic stocks, while peer Capita CPI.L has slashed profit forecasts and made plans to raise cash to avoid a similar fate.

The outlook is uncertain not just for UK domestics, however. A resurgent pound has reduced the forex-related boost enjoyed by big, international FTSE companies which benefited from an accounting boost following sterling's slump in the immediate aftermath of the June 2016 Brexit vote.

Britain's FTSE 100 was on track to end the first quarter of 2018 with a loss of 8 percent, its worst quarter since 2011 and making it the weakest-performing major European market so far this year, closely followed by Germany's exporter-heavy DAX .GDAXI .

A shock spike in volatility in February rattled global stock markets, which have also been hit by concerns over the prospect of a global trade war and a tumble in the heavyweight U.S. tech sector.

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