Market jitters continue to hit equities
Bank, property and airline shares plummet as Brexit hits
Travel companies and property firms also suffered sell-offs as George Osborne’s statement this morning failed to prevent the stock market from plummeting.
The FTSE 100 index of leading shares closed 2.55% or 156.49 points lower at 5,982.2 with shares in financial firms the most affected. Royal Bank of Scotland plunged 22% at one stage before closing 15% down at 174p and Barclays was down 17.4% to 127.2p.
They were intermittently suspended as automatic circuit breakers halted trading. These kick-in when a share price falls more than 8%.
Easyjet‘s shares fell more than 22.3% at one point after the airline said Brexit would contribute to a fall in revenues.
Property shares also plummeted. Taylor Wimpey fell 15% and Barratt Developments fell by over 19.4% and were also suspended.
The Brexit vote is expected to squeeze earnings, thereby compounding other pressures on banks such as tight margins and the costs of meeting new regulatory measures.
HSBC has warned it may move a thousand jobs from London to Paris, but this morning chairman Douglas Flint sought to reassure investors and customers.
In a statement, he said that the bank’s commitment to British businesses remains undiminished.
“We are today entering a new era for Britain and British business. The work to establish fresh terms of trade with our European and global partners will be complex and time consuming.
“We will be working tirelessly in the coming weeks and months to help our customers adjust to and prepare for the new environment.”
Yields on 10-year government bonds sank below 1% for the first time. The pound continued its downward move falling 3.6% to $1.317, having earlier hit a fresh 31-year low of $1.3151. Against the euro, it was down 2.5% at €1.2016.
The malaise spread across Europe with Italy’s UniCredit falling 7.2% and Credit Suisse hitting a new low.
Markets in Europe tumbled, with France’s Cac-40 and Germany’s Dax both down over 2%.