European and UK shares: A Year After Brexit Vote

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Another shake in commodity-related shares and dollar earners put weight on British blue chips on Friday, marking their under-performance against continental European rivals a year on from Britain’s vote to leave the European Union.

Britain’s FTSE 100 <.FTSE> was down 0.2% at its close, weighed down by weakness in health care and mining stocks.

Friday marked the first year anniversary of Britons voting in a referendum by a narrow margin to quit the EU, a surprising result which then turned sterling, British and European stocks into a tailspin.

While stocks have recovered distinctly from their fall in the immediate aftermath, in U.S. dollar terms, British stocks continue to lag rivals in Europe and elsewhere as a gloomy forecast for sterling dented confidence among foreign investors.

Mumford, a senior investment manager at Cavendish Asset Management said, “Brexit itself, I don’t think, has had much of an effect on the market, but what has had an effect has been the fall in sterling.”

Mumford said the uncertain results of this month’s national election in Britain was also now pressing on sterling.

“Because of the uncertainty that might have arisen from the election result, it may be that sterling is going to stay down longer than we thought,” Mumford added.

The pan-European STOXX 600 <.STOXX> index was down 0.2% as decline among financials, pharma firms and energy shares weighed.

British broadcaster ITV rose more than 3% after Morgan Stanley upgraded it to “buy,” citing its attractive appraisal.

Morgan Stanley analysts said, “timing is always tricky but typically the right moment to buy TV stocks is when advertising starts to improve, even if this is just on a second derivative basis.”

Shares in pizza parlor firm Domino’s Pizza were one of the biggest fallers, down 2.8% near a two-year low after a downgrade from Berenberg.

Berenberg analysts said Domino’s suffered possible issues ahead, including falling behind technology as well as food inflation putting weight on franchisee margins.

Finnish and Swedish markets were closed for the holiday.