’s FTSE 250 index closed the week 4.2% higher, posting its best day since May 2010.
U.K. high street lenders have been among the stocks hardest hit by Brexit uncertainty, and analysts at Citigroup Inc. predicted in August that a no-deal scenario could cut their earnings by as much as 25%. Both Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc’s shares surged on Friday. RBS — the “poster child” of no-deal risk fears, according to Bloomberg Intelligence’s Jonathan Tyce — rallied as much as 16%, the most in almost a decade. Even after Friday’s jump, RBS shares are still down about 13% since the referendum, while Lloyds is down about 18%.
Crest Nicholson Holdings Plc, which focuses on London and the surrounding commuter areas, has plummeted 31% since the referendum, while FTSE 100 member Taylor Wimpey Plc, also with big operations in the capital, has dropped about 15%. “We believe Taylor Wimpey is best-placed amongst U.K. housebuilders to gain from a post-Brexit market bounce back,” HSBC Holdings Plc’s Brijesh Siya wrote Oct. 9, citing the company’s strategy of building large sites and its potential to cut costs.
U.K. retailers have suffered as consumers curtailed spending amid uncertainty about how the economy would fare. The FTSE 350 General Retailers Index is down about 20% since the Brexit referendum. With more clarity, consumer and business confidence would both rise and the whole retail sector would benefit, Shore Capital analyst Clive Black said. Supermarkets would feel the impact of a stronger pound more quickly than non-food retailers, given they have shorter lead times on buying products from overseas, with Marks & Spencer Group Plc and Tesco Plc likely among the biggest beneficiaries.
The Labour leader has vowed to nationalize swathes of Britain’s water and energy firms, along with the railways and postal group Royal Mail Plc. If a Brexit deal increases the Conservative Party’s chances of winning an election, that could be positive for the sector. RBC Europe analyst John Musk wrote last month that an election would be a chance to scrutinize Labour’s “unchecked rhetoric” on the sector.
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