FTSE enjoys best quarter in years as it surges post referendum
THE FTSE 100 enjoyed its best quarterly performance in three-and-a-half years, as Britain’s blue chip companies continued to demonstrate their resilience to the Brexit vote.
In the three months that followed the shock decision to leave the EU, London’s blue-chip index jumped 6.07pc – its best quarterly performance since the quarter ended March 29 2013. Chris Beauchamp, of IG, said it wasn’t surprising to see some “last minute rallies in risk assets” at the end of the quarter, as institutional investors moved to “spruce up” their portfolios.
However, the buoyancy of the FTSE 100’s quarterly performance was largely overshadowed by the beleaguered Deutsche Bank. Its share price endured a tumultuous trading session, swinging between losses of 9pc and gains of 8pc. Reports hedge funds were trimming their exposure to Germany’s flagship lender rattled the banking sector in early trade, but hopes the bank was nearing a deal with the US to slash its fine to $5.4bn for mis-selling mortgage-backed securities eased the sector’s losses. On the day, the FTSE 100 dipped 20.09 points, or 0.29pc, to 6,899.33, with
Lloyds losing 1p to 54.6p. Its peers managed to claw their way back into positive territory – Barclays rose ½p to 167.8p, HSBC rose 0.4p to 578.7p and Royal Bank of
Scotland inched up 1.7p to 178.8p.
Separately, UBS cut Lloyd’s target price to 65p from 68p amid expectations its capital generation for the second half of the year will “disappoint”.
Capita found itself among the laggards for a second session after Thursday’s profit warning, as brokers issued a slew of bearish notes. Shares fell 28p to 670p. Although Goldman Sachs sees “limited” readacross for its peer Babcock
International, shares extended their slide, down 11p to £10.35.
Elsewhere, Burberry climbed 26p to £13.79 after RBC Capital Markets hiked its price target by £2 to £14 and raised its rating to “sector perform”. Analysts think the luxury fashion house is moving faster than its peers to adapt to millennial consumer behaviour changes. Builders’ merchant
Travis Perkins also edged 28p upwards to £15.44 on the back of a bullish note from Credit Suisse. The investment bank lifted its price target to £19.50 from £16.50, as it sees an “increasingly favourable market backdrop” for the FTSE 100 stock, and a return of price growth in 2017.
On the mid-cap index, Peppa Pig owner Entertainment One leapt 13.3p to 226.4p amid expectations its full-year financial performance will be in line with management’s estimates. Meanwhile, at its annual general meeting, 11.4pc voted against the directors’ pay report.
Finally, a strong trading update from iomart Group pushed shares 1p higher to 278p. The group said it was “confident” in the outlook thanks to strong demand for its services as enterprises continue to shift towards cloud-based infrastructure.