LIVE MARKETS-Look beyond UK blue chips!

ReutersApr 30, 2025 2:57 PM

US equity indexes decline; Nasdaq falls most, off ~2%
All S&P 500 sectors red; Cons Disc weakest group
Euro STOXX 600 index down ~0.2%
Dollar gains; gold slips; bitcoin off >1%; crude down >1.5%
US 10-Year Treasury yield ~flat at ~4.17%

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LOOK BEYOND UK BLUE CHIPS!

The UK and US appear to be making progress toward a trade deal that could eliminate most —if not all— of the current 10% reciprocal tariffs, which brokerage Stifel believes presents a compelling investment case for UK mid- and small-cap companies.

The proposed deal would give British exporters a crucial edge in the lucrative American market over countries still facing higher tariff barriers - from which British mid- and small-cap firms could particularly benefit, owing to their more focused business models and clearer exposure to specific markets.

Stifel estimates, citing Office of National Statistics (ONS) data, that the U.S. is the UK's largest export market for goods with 59 billion pounds of goods exported in 2024, with Germany being the second-largest market at 32 billion pounds.

A "triple discount" opportunity also makes UK stocks more rewarding, according to Stifel. UK companies currently trade at a discount to international peers, while small caps trade at a discount to large caps and value-oriented portfolios trade at a discount to the broader small cap market.

This creates a compelling valuation case for investors willing to look beyond recent underperformance. The FTSE Small Cap Index .FTSC has fallen 8.7% since the October 2024 Budget, while the FTSE 250 midcap index .FTMC has declined 5.5%.

Stifel recommends Mercantile Investment Trust MRCM.L for those looking to gain exposure to midcaps, Aberforth Smaller Companies Trust ASL.L for value stocks and, Henderson Smaller Companies Investment Trust HSL.L and BlackRock Throgmorton Trust THRG.L for growth stocks.

(Ragini Mathur)

EARLIER ON LIVE MARKETS:

WALL STREET DIPS AS U.S. ECONOMY CONTRACTS CLICK HERE

BENCHMARK TREASURY YIELD TRYING TO SNAP 6-DAY STREAK OF DECLINES CLICK HERE

CTAS: A TURNAROUND IN SIGHT? CLICK HERE

WHAT TO OWN IN A FRAGMENTED WORLD CLICK HERE

EUROPEAN EARNINGS BEAT THE BLUES CLICK HERE

STOXX INCHES HIGHER ON HEAVY EARNINGS DAY CLICK HERE

EUROPE BEFORE THE BELL: FUTURES STRUGGLING FOR DIRECTION CLICK HERE

DATA DELUGE ROUNDS OFF TURBULENT APRIL CLICK HERE

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