Brexit Optimism Fizzles as Cost of FTSE 100 Hedges Inflates
- U.K. stocks, near records, trade at premium to region’s shares
- JPMorgan lowered its rating to neutral from overweight
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As U.K. stocks hover near all-time highs, the optimism that took them there is starting to fade.
Investors are paying the most since early June to hedge against swings in the benchmark FTSE 100 Index relative to the regional Euro Stoxx 50 Index. The U.K. gauge, up 12 percent this year thanks to a slumping pound, has been hovering around 7,000 for most of the month, though it failed to maintain a record reached intraday on Oct. 11. It slipped 0.5 percent at 8:29 a.m. in London.