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April 16, 2020, 8:46 a.m. EDT

FTSE 100 underperformance vs. Europe continues

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By Steve Goldstein, MarketWatch


Associated Press
Benches stand taped off to stop people sitting on them, on the South Bank of the River Thames in London, during the lockdown to try to stop the spread of coronavirus, on April 15, 2020.

U.K. stocks edged higher on Thursday but underperformed their European rivals, continuing a stretch where companies on the Continent have done better.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.38%  rose 0.6% vs. a 1% gain for the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.19% .

Over the last month, the FTSE 100 is up nearly 5%, compared with a 9% gain for the Stoxx 600 and over 12% advance for the German DAX.

“The U.K. is particularly vulnerable on account of the index’s large weightings to more cyclical sectors such as energy, mining and banks,” said Sebastian Lyon, the founder and chief investment officer of Troy Asset Management, in a letter to clients.

“The dividend yield provided a false signal of value,” he added.

Of stocks on the move on Thursday, Rentokil Initial /zigman2/quotes/207510108/delayed UK:RTO -0.46%  shares rose 7%. The pest control and business services firm said revenue rose 7.2% in the first quarter at constant exchange rates.

“Pest control has been designated an essential service in the majority of markets and the impact of COVID-19 is also mitigated to some extent by the largely contractual nature of the portfolio and the fact it is less affected by business closures,” said Christopher Bamberry, an analyst at Peel Hunt.

Barratt Developments /zigman2/quotes/209812640/delayed UK:BDEV -1.98%  rose 5% after reporting it completed work on 1,349 homes between March 23 and April 12 and that it has furloughed 85% of staff.

UBS analyst Gregor Kuglitsch said the order book decline to 12,376 units — a drop of 1,460 since March 22 — implies “some cancellations” but “equally nothing particularly dramatic.”

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,613.75
+25.22 +0.38%
Volume: 656,176
March 2, 2021 4:58p
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/zigman2/quotes/210599654/delayed
XX : STOXX
413.23
+0.79 +0.19%
Volume: 0.00
March 2, 2021 11:03p
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/zigman2/quotes/207510108/delayed
UK : U.K.: London
473.70 p
-2.20 -0.46%
Volume: 2.51M
March 2, 2021 4:35p
P/E Ratio
36.35
Dividend Yield
0.32%
Market Cap
£8.78 billion
Rev. per Employee
N/A
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/zigman2/quotes/209812640/delayed
UK : U.K.: London
684.20 p
-13.80 -1.98%
Volume: 1.95M
March 2, 2021 4:35p
P/E Ratio
17.33
Dividend Yield
1.10%
Market Cap
£7.10 billion
Rev. per Employee
£513,779
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Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.

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