The performance of the FTSE 100 (INDEXFTSE: UKX) in the wake of last month’s Brexit vote has no doubt surprised even the most optimistic stock market commentator. After some initial bumpiness, Britain’s blue chip index has stridden resoundingly higher and struck 11-month highs around 6,700 points just this week.
This strength does have some logic. After all, the FTSE 100 is packed with companies whose massive international exposure minimises the possibly-negative implications of the leave vote. And of course many stocks with huge overseas operations also stand to gain from heavy sterling weakness in the months — and possibly years — ahead.
Indeed, demand for the UK’s big-caps could carry on rising should the pound continue to haemorrhage value as many experts are predicting.
Both HSBC and Goldman Sachs are convinced that sterling will plumb to 1.20 against the US dollar by the end of the year, worsening from the 31-year trough below 1.30 hit in recent days. And Deutsche Bank expects a slip to 1.15 in the months ahead.