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