After Busy Trading Day London Markets Down By 3%

The FTSE 100 recovered some of its earlier losses, despite markets initially falling on news that the UK had voted to leave the EU

Karen Kwok 24 June, 2016 | 5:48PM
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The FTSE100 avoided a full scale rout, and closed today down just 3% at 6138.69  - higher than it was at the start of this week. This is despite the market falling to 5806 in early trading.

However the FTSE 250 suffered a more significant loss - down 7.19% on the day. European markets also felt the fallout from the EU Referendum vote, with the Dax in Frankfurt down 6.8% on the day - its worst day since the financial crisis in 2008. The CAC in Paris shed 8%, Madrid fell 12% while the Milan stock market was down 12.5%.

Homebuilders and Banking Shares Led Declines in FTSE 100

The biggest faller of the day in FTSE 100 was homebuilder stock Taylor Wimpey (TW.), falling an eye-watering 29.3% on the day. Other major housebuilding stocks suffered similar losses:   Persimmon (PSN) lost 27.6% to close at 1520p, while shares of Barratt Developments (BDEV) were down 23.8% to 439.80p. Property development company Berkeley Group Holdings (BKG) fell 21% to 692p.

The impact of Brexit also sent ripples across financial sector in the UK, with banking share suffered heavy losses. Lloyds Bank (LLOY) fell 21%, Barclays (BARC) dropped 17.7% and Royal Bank of Scotland (RBS) was down 18%.

Despite a turbulent day, there were some FTSE stocks that record gains. A gold rally sent shares of gold and mining companies up by more than 10%: Randgold Resources (RRS) gained 13.9% to 7370p and Fresnillo (FRES) was up 11.8% to 1386p. Other defensive stocks, including pharmaceuticals and tobacco companies also finished the day with modest gains.

Will Companies Relocate Staff Out of London? 

After the Brexit outcome, there were unsubstantiated rumours of a number of banks planning to relocate staff out of London. Meanwhile, Vodafone (VOD) said it was “too soon” for it to know whether or not the UK’s vote to leave the EU will mean it will have to relocate its headquarters.

Sports Direct International (SPD) on Friday said market volatility and exchange rate movements following the UK's decision to leave the EU are likely to hit purchases it makes from the current financial 2017 year and beyond.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barclays PLC185.90 GBP0.00Rating
Barratt Developments PLC741.00 GBP0.00
Berkeley Group Holdings (The) PLC4,744.00 GBP0.00
Frasers Group PLC707.00 GBP0.00
Fresnillo PLC880.20 GBP0.00
Lloyds Banking Group PLC47.37 GBP0.00Rating
Morgan Stanley101.25 USD0.00Rating
NatWest Group PLC221.60 GBP0.00Rating
Persimmon PLC2,855.00 GBP0.00
Taylor Wimpey PLC169.30 GBP0.00
Vodafone Group PLC113.10 GBP0.00Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk