(Bloomberg) -- Barclays Plc strategists still favor stocks exposed to the U.K. economy over exporters listed in London despite a report saying the British government sees the chances of reaching a Brexit deal as low.
“We expect to see a lot of these kind of headlines over the next few weeks, but in any case, an extension is still most likely,” Barclays's head of European equity strategy, Emmanuel Cau, said by phone.
Strategists led by Cau said in a pre-market report that they now favor U.K. domestic-focused stocks over exporters amid a likely Brexit breakthrough, noting they trade at a material valuation discount to the broader British market.
“This is not a trade for one hour,” Cau continued after the latest news. “We still see a road-map ahead of a smooth exit. But it will take many more headlines, stress and pain to get there.”
Since then, European Union officials have also indicated that the chances of a deal are diminishing, according to a report.
The FTSE 250 was down 0.8% at 9:50 a.m. in London, paring its rise since Friday to about 4.3%.
To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Jon Menon, John Viljoen
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
