British markets continue to tumble following Brexit

Shares of precious metal mining companies have however extended their previous week’s upward trend.

In the wake of Britain’s historic referendum which has created seismic shocks for economies around the world, share prices in Britain have tumbled even lower thus extending their previous week’s losses. The heavy air of uncertainty that is prevalent in Britain, shares of British banks, budget airlines and those of house builders have hit a new low.

The blue-chip FTSE 100 index fell by 1.1% to 6,071.19 points at 0823 GMT, while the mid-cap FTSE 250 was down by 3%.

For the first time, George Osborne, Britain’s finance minister, spoke publicly on the Brexit vote. With his calm demeanor perhaps he hoped to sooth the vexed nerves of the Britain’s market and its economy.

Shares of easyJet, Britain’s budget airlines, saw a near vertical fall of 16% after it issued a warning on its third quarter profit, citing uncertainty following Britain’s historic vote.

With Goldman Sachs downgrading IAG to “neutral”, easyJet’s rival, its shares also fell by 9.2%.

Barclays and Royal Bank of Scotland have also come under intense market pressure, and were down by 12.2% and 9.6% respectively. Both have been downgraded by JP Morgan. In fact, all domestic British banks have been downgraded by JP Morgan.

“The UK’s vote to leave the EU will drive tectonic plate shifts in European bank investing. We move to a slow growth/modestly recessionary scenario for UK banks,” said analysts at Jefferies in a note to clients. RBS has been rated to “hold” while Barclays’ rating has gone to “underperform”.

In the Housebuilders’ section, the top losers were Taylor Wimpey, followed by Persimmon, Barratt Developments and the Berkeley Group. All of them fell by 7.4% to 10.8%.

Shares of mining companies of precious metals, including that of Fresnillo and Randgold Resources were listed among the top gainers. While Fresnillo’s shares rose by 6.2%, shares of Randgold Resources rose by 5.5%. Shares of both companies have extended their gains from last week.

Categories: Economy & Finance, Strategy


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