British stocks climbed higher on Tuesday despite the Conservative Party’s lead narrowing in two separate election polls.
The FTSE 250
moved to 15-month highs, climbing 0.6% above 20,800 points, while the FTSE 100
edged 0.1% higher. The pound
slipped 0.2% to $1.2875 as sterling investors, who fear a Labour government under Jeremy Corbyn, digested the latest polls.
What’s moving the markets?
Two weeks from the election on December 12th, and the prospect of some clarity for markets, the FTSE 250 moved jumped to its highest level since August 2018 on Tuesday.
The pound, which usually moves in step with the index, dropped as two polls showed Johnson’s lead over Labour had narrowed.
“The market seems to be growing more confident that the Conservative Party will win the general election in December, thus bringing some clarity to what might happen with Brexit and — importantly — removing an element of uncertainty which has hung over U.K. equities. Interestingly the pound wasn’t sharing the FTSE 250’s joy, ”AJ Bell investment director, Russ Mould, said:
After two consecutive days of gains on raised hopes for a U.S. – China trade deal, the major European indexes edged lower as investors patiently awaited further developments.
The Chinese Commerce Ministry said trade envoys on both sides have agreed to hold further talks on a preliminary deal. State media Xinhua News Agency said they had agreed to “maintain communication” on remaining issues around the Phase 1 deal. After months of conflicting news investors failed to get excited by more talks.
The internationally-exposed FTSE 100 outperformed the other indexes, however, boosted by a weaker pound, which gave back much of Monday’s gains following conflicting election polls.
Which stocks are active?
Shares of U.K. bank note and passport printer De La Rue
plunged more than 22% on Tuesday as the company warned of its future, suspended its dividend and reported a loss in the first half of the year.
fell 5.7% after the FTSE 100 support-services company reported a 3.3% fall in pretax profit for the fiscal year 2019. However, full-year revenue growth of 6.4% beat targets of a 4-6% rise.
Pets at Home
climbed 11% in early trading as the company said it now expected full-year profit at the top end of the market consensus due to higher demand for its pet food and vet services.