UK stocks have made a stronger start to 2016 than European ones: the FTSE 350 index is only marginally down, while the pan-European Stoxx 600 has fallen by 9%. The FTSE 350’s valuation has also crept up to 16.5 times 2016 earnings, compared to the Stoxx’s 15.3. The gap between the two is the widest in over a decade, says Manisha Jha on Bloomberg. com.
The FTSE contains twice as many commodity firms as the Stoxx so the oil and metals rebound has helped. Nor are Brexit jitters having much impact; weaker sterling implies higher earnings, as many FTSE firms report in dollars.