The UK stock market suffers widespread falls as the UK votes to leave the EU. The FTSE 100 is down 6.7% and the FTSE 250 falls 10.3% in the first half hour of trading.
Some bargain hunters are pouncing on the weakness with a few blue chip stocks recovering some lost ground since the market open, albeit only minor compared to the overall decline.
PROPERTY FEARS
Housebuilders take the biggest hit from the EU referendum decision as investors fret about a slump in the property market.
Taylor Wimpey is down 40.3%, Berkeley falls 35.9%, Crest Nicholson drops 34.8% and Barratt Developments slumps 28.6%.
Broader property-related stocks are also dragged down. Commercial property developer British Land declines 28.9% as demand could be hit for its office blocks if foreign companies downsize their UK operations.
Flexible office provider Workspace falls 21.5% as investors worry about a decline in UK economic strength and the impact that might have on small businesses.
FINANCIAL FIRMS
UK-focused banks have been hit particularly hard. Lloyds Banking and Royal Bank of Scotland lead the fallers among the FTSE 100 banks. Lloyds plummets 26.1% while RBS dives 19.4% to 201.7p in early trading. Both have repositioned their operations in recent years to focus on UK retail and commercial markets.
Barclays did not escape the sell-off due to its large presence on the UK high street, falling 27.9% to 134.7p.
The UK’s largest bank by assets, HSBC appears to have avoided the worst from investor concerns falling only 4.8% to 433.8p. Although the lender operates from a tower in Canary Wharf much of its revenues are generated overseas.
In the FTSE 250, small business and residential mortgage lender Aldermore has 22.9% wiped off its market value. Shawbrook, which targets the same markets, experiences a similar fall.
European banks also suffer. Deutsche Bank trades 21% lower and Commerzbank is down by 18.9%.
Shares in asset managers, whose income is dependent on the level of financial markets, also experience heavy losses. London’s largest listed fund manager Schroders tumbles 20%, emerging markets focused Ashmore declines 14.3% and Jupiter Asset Management falls 14.1%.
Investors also lose confidence in life insurers listed in London. Legal & General sheds a fifth of its value, while Aviva slumps 19.8% to 356.3p. St James’s Place, which typically serves a wealthier customer, trades 15.9% lower to 777.2p.
Asia-focused protection and savings group Prudential also suffers, down 11.6% to £12.00.
CONSUMER CONFIDENCE
Concerns about a slump in consumer confidence and the knock-on effect to spending patterns puts a dent in leisure and retail stocks. Restaurant Group falls 29.8%, WH Smith retreats by 27.4% and Halfords drops 21.9%.
In a double whammy of property and consumer spending fears, kitchens seller Howden Joinery drops 23%.
Tour operators take a big hit as the market will be worried about the potential increase in costs for travelling around Europe and the potential reluctance for consumers to go on foreign holidays if UK economic conditions come under pressure. Thomas Cook drops 25.4% and TUI retreats by 21.9%.
EMPLOYMENT FEARS
Financial services recruitment specialist PageGroup is one of the day’s biggest fallers, down an extraordinary 52%.
Fellow mid cap staffing outfit Hays dips 29% and mid cap temporary recruiter Staffline reverses gains yesterday to trade 11% lower at £10.72.
RARE RISERS
Only 10 stocks in the FTSE 350 are in positive territory. Precious metal miners lead the charge on the back of a 4.7% rise in the gold price. Acacia Mining advances 14.7%, Randgold Resources is up 14% and Fresnillo jumps 11.9%
Rolls-Royce is a surprise riser, up 2.2% and drug maker GlaxoSmithKline nudges ahead by 0.2%.
