FTSE 100 vs FTSE 250: How Brexit Vote Will Impact
FTSE 100 Analysis and News
- PM May Set to Lose Meaningful Vote
- Brexit Vote Outcome to Determine FTSE Outperformer
See our Q1 forecasts to learn what will drive price action through the quarter
Meaningful Vote Defeat to Drag on FTSE 250
The focus today will be on the meaningful vote, in which PM May will be hoping to get her withdrawal agreement passed parliament. However, given the sizeable number of MPs against her deal, it is highly likely that Theresa May will fail to get her deal approved. As such, while the initial reaction could see the domestically exposed FTSE 250 underperform relative to the FTSE 100, much of this will depend on what happens next. As a reminder, a weaker GBP tends to benefit most of the international companies that make up the FTSE 100. The reason being is that 2/3 of the revenue generated among FTSE 100 companies are from overseas. Consequently, repatriated profits are worth more in Sterling terms when the Pound drops.
In the immediate aftermath of the Brexit referendum, the hardest hit sectors had been financials, housebuilders, retail, travel and leisure firms, falling on average by 21%.
Source: Refinitiv. Spread between the FTSE 250 and FTSE 100 over a 5-yr time frame.
Brexit Vote Outcome to Determine FTSE Outperformer
|Vote Outcome||Likelihood||GBP Impact||FTSE Outperformer|
|May Wins||Least Likely||Most Bullish||FTSE 250|
|Narrow Loss (1-50 votes)||Likely||Slightly Bullish||FTSE 250 Marginally|
|Wide Loss (100+)||Most Likely||Bearish||FTSE 100|
0900: PM May meets with senior ministers
1030-1130: Amendments to be voted on will be made public
1245: Brexit debate to begin
1900: Brexit debate to end
2000-2100: Meaningful vote to take place
All times GMT
Results to follow
- GBP/USD to Fall on Likely Brexit Deal Rejection - What’s Next?
- Brexit Analysis: How GBP & Stocks Might React to Alternative Outcomes
KEY TRADING RESOURCES:
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- See our Q1 forecasts to learn what will drive FX the through the quarter.
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.firstname.lastname@example.org
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.