Three tailwinds for the FTSE 100
STOXX 600 up 0.7%
Banks top gainers
UK heads to polls
Wall Street on holiday
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THREE TAILWINDS FOR THE FTSE 100
In a crucial day for UK politics, markets are waiting for the election results, with polls putting the Labour Party on course for a landslide victory over the Conservatives.
Since April, London's FTSE 100 .FTSE has been outperforming other European indexes. The UK economy has bounced back from last year's downturn in contrast with weaker growth in the rest of Europe, especially in Germany.
Many investors believe the good times may not be over for British stocks. Deutsche Bank strategists give three reasons to stay constructive on the FTSE 100:
1) Low volatility: unlike the French elections, UK elections have created little concern among investors, as the Labour lead in polls is significant with no major surprise expected. Moreover, both parties plan to bring down the budget deficit and debt level over the next 5 years.
2) Sector mix: the FTSE 100 has a good balance of cyclical and defensive sectors with a higher weight of basic resources, staples and utilities - where DB is overweight - and a lower weight in industrials and technology versus the STOXX 600.
3) Solid earnings: in line with the rest of Europe, DB expects the recovery in UK earnings to accelerate in the second half of 2024, leading to a 3% full-year growth for the FTSE 100. Additionally, a normalization in rates, inflation and an economic recovery should support the small caps which in the broker's view remain too cheap compared large caps.
(Matteo Allievi)
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EARLIER ON LIVE MARKETS:
WHAT'S UP WITH TESLA? CLICK HERE
STOXX TICKS HIGHER ON SURGING AUTOS CLICK HERE
EUROPEAN STOCKS CATCH A TAILWIND FROM US RATE OPTIMISM CLICK HERE
BETS MOUNT FOR US RATE CUT, UK POLITICAL SHAKE UP CLICK HERE
FTSE 100 vs ESTOXX 50 https://tmsnrt.rs/4cxlSMf
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