Britain's FTSE rebounds from 2-month low as banks rally

HS Govtech Solutions

04/12/2017 09:43

(ADVISORY- Follow European and UK stock markets in real time on 
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    * FTSE 100 up 0.8 pct 
    * U.S. tax reform progress boosts banks 
    * Precious metals miners dumped in risk-on move 
    * Brexit meeting puts pressure on sterling 
 
    By Kit Rees 
    LONDON, Dec 4 (Reuters) - The UK's top share index rose from 
a two-month low on Monday, joining in a broader rally among risk 
assets sparked by progress in U.S. tax reforms, which lifted 
shares in British banking stocks.     
    The blue chip FTSE 100  .FTSE  index was up 0.8 percent at 
7,358.81 points by 0935 GMT, in line with a broadly positive 
continental European market. 
    Financials were the biggest boost to gains, adding around 20 
points to the index as shares in HSBC  HSBA.L , Barclays 
 BARC.L  and Lloyds  LLOY.L  all rose between 1 percent to 3 
percent. 
    "For all the other indices around the world, the tax reform 
is something everyone's been keeping an eye on, so that's 
definitely the main driver in the U.S. and I think that's 
trickling over to Europe as well. We're see a bit of a relief 
rally," John Moore, trader at Berkeley Capital, said.   
    Banks are seen as the biggest beneficiaries of a cut in the 
corporate tax rate in the United States, and their shares also 
tend to see the biggest reactions when investors buy into risky 
assets. 
    Conversely, shares in more defensive stocks, such as 
precious metals miners Fresnillo  FRES.L  and Randgold Resources 
 RRS.L , were among the worst performers, both down 1.9 percent 
and 0.7 percent respectively. 
    While individual stock moves were relatively limited among 
both blue chips and mid caps  .FTMC , investors were looking 
ahead to a key meeting between British Prime Minister Theresa 
May and European Commission President Jean-Claude Juncker. 
    Last week strength in sterling on the back of optimism over 
Brexit talks weighed on the FTSE 100, which ended the week with 
a 1.5 percent loss. The index fell to a two-month low as its 
predominantly dollar-earning constituents were hit by a rise in 
the currency. 
    On Monday, the pound was subdued ahead of the Brexit summit, 
which in turn supported the FTSE 100. Shares in heavyweight 
overseas earners British American Tobacco  BATS.L  and Diageo 
 DGE.L  advanced 0.4 percent and 0.7 percent respectively.      
    "We've already kicked off the day with a weak pound which 
has helped the FTSE drive higher, so we'll be watching those 
talks throughout the day, keeping a close eye on cable because, 
as we saw last week, that can move pretty quickly," Berkeley 
Capital's Moore said, referring to the sterling-dollar exchange 
rate. 
     
 
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British Stocks vs. Sterling    http://reut.rs/2A192YD 
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 (Reporting by Kit Rees; Editing by Raissa Kasolowsky) 
 ((kit.rees@thomsonreuters.com; +44 207 542 2784;)) 
  
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Keywords: BRITAIN STOCKS/