Bookending the UK Index this week are two stocks impacted heavily by a surprise snap election announcement by UK PM  May. This sent GBP higher on hopes that a Conservative landslide will allow for a smoother and more orderly Brexit thanks to a bigger parliamentary majority and a better negotiating hand with Europe. It also proved a double-edged sword for the UK Index which was the standout index underperformer this week, giving up a whopping 2.8%, its international exposure hurt from a currency translation standpoint and oil prices plunging to make matters worse for key Energy and Mining names.

No frills airline easyJet (+6.8%) benefited from a perceived boost to UK consumer buying power as the GBP climbed against the EUR. A stronger GBP vs USD also makes fuel costs cheaper and the oil price fall this week provided an additional benefit. This helped deliver a bullish technical breakout that gained momentum, taking them through the 2017 cloud-line at 1080p and above 1100p for the first time since last September, a month in which it traded as high as 1200p (7% from where we trade). Hopes of a smoother Brexit having less of an impact on its European-reliant business model also helped.

Luxury brand Burberry (-10.8%), on the other hand, was dealt a double-whammy blow from poorly received Q4 results (surprise deceleration in US Q4 sales) and fears that a hitherto tailwind from a weaker GBP might become a worrying headwind. The shares lost almost 8% on Wednesday after results, having already given up over 3% on Tuesday’s election announcement from PM May. With questions still being asked of US stimulus policies and whether global equities have got ahead of growth expectations, this brace of news served to take the shares abruptly from recent highs.

Other names of note this week include Royal Bank of Scotland which benefited from a technical bounce from 4-month rising support, hopes of positive Q1 results next week and a smoother Brexit as well as confirmation the Treasury was edging closer to a full exit from its bailout stake in peer Lloyds. It’s nowhere near doing the same with RBS, but a rising tide tends to lift sector boats.

At the other end of the spectrum, precious metals Miners Fresnillo and Randgold Resources both gave up 6-8% as Gold and Silver extended their retreats from recent risk aversion fuelled highs.

Yes I am writing this at the end of the week after the proverbial horse has bolted, but don’t forget I am my trading colleagues are here watching the whole UK 100 (and much more) all day every day. This means we are aware of the big moves and momentum as soon it starts to happen.

As a client, with an interest in any of the above stocks, you’d have been first to know, giving you the opportunity to trade (buy in, buy more, hold firm, sell some, sell all or even sell short). Furthermore our research publications included two of the above names as either trade ideas or technical observations this week.

To find out which names I am talking about get access to our research permanently and see for yourself why our clients value our product so much and why we were recently voted 2017 best CFD Research Service.

As always, enjoy your weekend.

Mike van Dulken, Head of Research, 22 April 2017