FTSE falters as easyJet, housebuilders and banks tumble

by Jonathan Adams

British stocks opened lower on Monday, extending losses from the previous session as last week’s vote to leave the European Union hurled Britain into political uncertainty, hitting the shares of British banks, housebuilders and budget airline easyJet.

The blue-chip FTSE 100 index .FTSE fell 1.1 per cent to 6,071.19 points by 0823 GMT, with the mid-cap FTSE 250 .FTMC down 3 per cent.

Britain’s finance minister George Osborne spoke publicly on the Brexit vote for the first time on Monday morning, looking to calm markets with an assertion that the British economy remains strong.

Shares in easyJet (EZJ.L) slumped more than 16 per cent — on track for its biggest daily decline since January 2011 — after it warned on third-quarter profit, citing an uncertain outlook because of the Brexit vote.

Rival IAG (ICAG.L), which operates British Airways, fell 9.2 per cent after Goldman Sachs downgraded the company to “neutral”.

Among financials, Royal Bank of Scotland (RBS) (RBS.L) and Barclays (BARC.L) also came under pressure, down 12.2 per cent and 9.6 per cent respectively, hit by a spate of broker downgrades as well as JP Morgan cutting its rating on all UK domestic banks.

“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,” analysts at Jefferies said in a note, downgrading RBS to “hold” and Barclays to “underperform”.

Housebuilders were also among the top fallers, with Taylor Wimpey (TW.L), Persimmon (PSN.L), Barratt Developments (BDEV.L) and Berkeley Group (BKGH.L) down between 7.4 per cent and 10.8 per cent.

This article is for information purposes only.
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