Strong Earnings Reports Support FTSE

The FTSE 100 is hovering just short of a one-month high point, with strong earnings reports supporting the index. Barratt developments outperformed its peers in the housebuildng sector, and helped the UK’s leading index to hover 1.4 percent below its March record of 7,447 points.

UNDEFINED - Wednesday, May 10, 2017

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Over the last few weeks the main drivers have switched, and the US, UK and Euro-zone are all focusing on earnings, which has been a positive thing so far. Earnings growth expectations for blue chips are improving, especially as the sterling remains weak. The small and mid-caps are benefiting from the current economic state too.

Barratt topped the blue chip charts, gaining 4.1 percent after it confirmed that its full-year profits would be at the top end of guidance. Forward sales are also currently at record levels. Barratt was one of the companies worst affected after the Brexit vote, but it bounced back to hit an 18 month high, and is up by 95 percent compared it its post-brexit low.

Investors are now becoming more amenable to buying consumer-exposed stocks, and the markets have already priced in the possibility of inflation-related hits to consumption.

Barratt was not the only company to put in a strong performance today. Next, ABF and Kingfisher have also performed well. Meanwhile, ITV shed 1.7 percent, after announcing that revenues may fall by as much as 20 percent during June. The company’s guidance for full-year performance remained unchanged, and the broadcaster had made it clear several times this year that it expected to see a fall in advertising revenues.


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