UPDATE 2-FTSE 100 at 5-1/2-mnth high as no-deal Brexit fears hit pound

By Kitco News / March 21, 2019 / www.kitco.com / Article Link


* FTSE 100 up 0.9 pct
* FTSE 250 down 0.2 pct
* Exporter stocks boosted by weak pound
* Miners, oil stocks also among top boosts


* Next sheds early losses to end up after results
* Renishaw, IG Group slip after results (Adds company news items, updates closing prices throughout)By Shashwat Awasthi and Yadarisa ShabongMarch 21 (Reuters) - Britain's FTSE 100 jumped to itshighest level in five-and-a-half months as its multinationalstocks got a boost from weaker sterling, while results-drivenslumps in engineering firm Renishaw and trading platform IGdented the midcap index.The FTSE 100 bounced 0.9 percent, comfortablyoutperforming its European peers, as the pound dipped amidgrowing concern that a no-deal Brexit would become a reality.Many large UK-listed firms earn the bulk of their incomeabroad in foreign currencies and their shares benefit from afalling pound. The midcap FTSE 250 , more domesticallyfocussed, was 0.2 percent lower.


The Brexit news also dragged down shares in Lloyds and Royal Bank of Scotland by 3 percent as banks areamong the most vulnerable to a potential hit to the economy ifthe UK falls out of the European Union without a deal.


With just eight days to the exit date, French PresidentEmmanuel Macron warned Prime Minister Theresa May that Britainwould face a disorderly departure if she fails to get lawmakersto approve her deal on a third attempt next week. Exporter stocks including GlaxoSmithKline ,AstraZeneca and Reckit Benckiser all gained onthe pound's fall.Miners added 1.4 percent boosted by a weakdollar and on hopes of tighter supply after Vale saidit would halt production at a Brazilian mine, while oil majorsrose amid OPEC supply cuts and U.S. sanctions against Iran andVenezuela.The Fed on Wednesday abandoned projections for any interestrate hikes this year amid signs of an economic slowdown, andsaid it would end its balance sheet reduction in September,which softened the dollar. In a similar vein, the Bank of England kept interest ratessteady on Thursday and said most businesses felt as ready asthey could be for a no-deal Brexit that would likely hammereconomic growth and jobs. Precious metals miner Fresnillo rose 4 percent tobe among top blue-chip gainers as safe-haven assets like goldwere in demand.


Clothing chain Next shed early losses to be up 2.6percent after reporting a profit in line with expectations,which Investec analysts said were helped by a strong performancein the Label business.


Mid-cap housebuilder Crest Nicholson slumped 9percent on its worst day since May as the stocks tradedex-dividend.Results drove some steep moves as precision engineeringgroup Renishaw tanked 11.2 percent, its biggest drop inmore than a year, after cutting its annual profit target. Online financial trading firm IG Group shed 6percent to a near two-year low following a drop in quarterly nettrading revenue as stricter regulations hurt its UK and Europeanunits. Fashion retailer Ted Baker gave up 4.7 percent afterits first drop in annual pretax profit since the financialcrisis. (Reporting by Shashwat Awasthi and Yadarisa Shabong, additionalreporting by Muvija M in Bengaluru; Editing by Toby Chopra andGareth Jones)

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