Brexit: Shares of UK-focused firms hammered by political uncertainty amid resignations

Housebuilders were especially hard hit, but there was also pain for banks and retailers

Ben Chu
Thursday 15 November 2018 13:38
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The shares of UK-focused firms were pounded on Thursday as Theresa May’s cabinet was rocked by resignations over her proposed Brexit deal.

Housebuilders were especially hard hit, with Persimmon and Taylor Wimpey closing down 7.3 per cent and 7.5 per cent while Barratt Developments and Berkeley Group ended 7.4 per cent and 6.2 per cent lower.

UK Banks were in the line of fire, with the Royal Bank of Scotland, in which the government still has a 62 per cent stake, sliding by 9.6 per cent . Lloyds fell 5 per cent and Barclays 4.1 per cent.

Retailers were also hit, with Marks and Spencer losing 4.7 per cent and Next 4 per cent.

There was also pain for easyJet, which could be unable to fly planes to and from the UK in a no-deal Brexit scenario, losing 6.6 per cent.

The Royal Mail’s shares slid 6.4 per cent lower, taking the shares to 323p, below the 2013 float price for the first time.

The overall FTSE100 index was, however, flat on the day, supported by the almost 2 per cent slide in sterling and the fact that many of its constituents are multinationals, earning revenues abroad in foreign currencies.

The more UK-focused FTSE250 Index closed 1.31 per cent down.

“The market has taken a big red pen to stocks which are heavily exposed to the UK economy like the banks, retailers and housebuilders,” said Laith Khalaf of Hargreaves Lansdown.

“These sectors were already under pressure, but the potential for an orderly Brexit to unravel in the next few days is causing further distress to be manifested in share prices.”

“The sense that it might not just be the Brexit deal that is unravelling but also the government, suggests another dimension to the selling: concern that if the Conservative government falls, Labour might replace it in the event of a snap election,” said Ken Odeluga of City Index.

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