FTSE 100's Fresh Record Masks Gloomier Outlook for U.K. StocksBy
The FTSE 100 Index delivered an early Christmas gift on Friday, with gains putting the British benchmark on course for yet another record close on the last day of trading before the festivities. But there may not be room for much more in 2018, say strategists, who on average forecast only a 0.4 percent upside for the gauge.
Closing above 7,600 points for the first time on Thursday, the FTSE’s 3.8-percent rally this month -- helped by renewed sterling weakness -- is beating euro-area peers that remain in the red for December. That’s small consolation for investors as it’s still poised to end the year as the worst-performing major European index.
With fund-manager pessimism over Brexit at a historic high as negotiations with the European Union get bogged down and with sterling’s 2017 recovery threatening exporter profits, strategists say the FTSE’s relative weakness is likely here to stay. They’re predicting the Euro Stoxx 50 will end next year 5.6 percent higher than its current level, according to average analyst estimates compiled by Bloomberg.