London midday: Stocks and sterling slip further as Brexit result sinks in

London stocks continued to tumble after Britain's decision to leave the European Union last week, with the market largely ignoring attempts to reassure the market by George Osborne.

By midday the FTSE 100 was down 95 points or 1.56% to 6,043.81, while the more UK-focused 250 index had fallen 826.86 points or 5.14% to 15,261.19 as both indices were led lower as the share prices banks and house builders resumed their plunge after a weekend's break.

The pound fell sharply in during the Asian session, but flattened off as the Chancellor gave a speech where he attempted to calm the markets, before speeding lower.

Sterling was down 3.4% versus the dollar at 1.3219, its lowest level since 1985, and down 2.6% on the euro at 1.1992.

Saying the Brexit result was “not the outcome that I wanted”, Osborne said the Treasury and Bank of England were “ready to deal with the consequences” and retracted his recent warnings of an emergency budget.

The Chancellor said he favoured delaying triggering Article 50 - to start the process of leaving the EU – until it’s clear what the terms would be in October when a new Prime Minister will have been chosen.

Market analyst Connor Campbell of SpreadEx commented: "Initially the FTSE had (relatively) held its ground, the index somewhat boosted by George Osborne’s attempts to reassure the markets. However, it seems that the impact of the Chancellor’s charms were short-lived."

Having earlier wondering if Friday's late rally "was a dead-cat bounce", Mike van Dulken at Accendo Markets said markets were struggling to digest Friday's Brexit vote and what it means for the UK outlook and that of London-listed equities and the pound.

"Weekend political upheaval from both sides and a leadership vacuum has done little to calm investor nerves about the near term future, with the most sensitive stocks to the Leave vote - banks, property, airlines - getting another drubbing which has in some cases wiped out the recoveries seen on Friday from knee-jerk Brexit lows," Van Dulken said.

Several brokers downgraded their ratings for the banking sector, with trading in Barclays and RBS temporarily halted after falling by 12.5% and 14.5% respectively.

Among the housebuilders, Berkeley Group and Taylor Wimpey also triggering circuit-breakers.

In company news, EasyJet was leading the fallers, down more than 10% after it warned that profits were lower than expected in the third quarter and that the UK decision to leave the EU is likely to mean revenues in the second half of the year will be lower than last year, while costs will be £25m higher due to oil and currency movements.

Following the Brexit vote, the budget airline predicted "additional economic and consumer uncertainty is likely this summer and as a consequence it is expected that revenue per seat at constant currency in the second half will now be down by at least a mid-single digit percentage" compared to the second half of 2015.

Estate agent Foxtons was down almost 20% after it warned full-year revenue and adjusted earnings will be “significantly lower” than the previous year due to uncertainty caused by the referendum.

In a trading statement ahead of the company’s interim results on 29 July, it said the run-up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty.

Aviva was down despite trumpeting that its capital position was resilient to market stress, adding that Brexit will have no significant operational impact on the company.

Aviva said its Solvency II coverage ratio remained close to the top of its working range of 150% - 180% after the the UK's decision to leave the European Union.

Market Movers

FTSE 100 (UKX) 6,039.00 -1.62%
FTSE 250 (MCX) 15,280.95 -5.02%
techMARK (TASX) 2,988.33 -1.96%

FTSE 100 - Risers

Fresnillo (FRES) 1,496.00p 7.94%
Randgold Resources Ltd. (RRS) 7,920.00p 7.46%
Mediclinic International (MDC) 1,019.00p 3.35%
AstraZeneca (AZN) 4,129.50p 2.43%
Diageo (DGE) 1,918.50p 2.16%
Royal Dutch Shell 'B' (RDSB) 1,923.50p 2.12%
United Utilities Group (UU.) 946.00p 1.94%
National Grid (NG.) 1,002.50p 1.84%
Royal Dutch Shell 'A' (RDSA) 1,904.00p 1.71%
Imperial Brands (IMB) 3,752.00p 1.58%

FTSE 100 - Fallers

easyJet (EZJ) 1,066.00p -18.81%
Royal Bank of Scotland Group (RBS) 171.60p -16.42%
Taylor Wimpey (TW.) 114.20p -16.09%
Barclays (BARC) 130.60p -15.14%
Barratt Developments (BDEV) 375.00p -14.73%
Travis Perkins (TPK) 1,400.00p -13.58%
Persimmon (PSN) 1,320.00p -13.16%
Berkeley Group Holdings (The) (BKG) 2,274.00p -12.30%
Capita (CPI) 874.50p -11.62%
Legal & General Group (LGEN) 170.30p -9.66%

FTSE 250 - Risers

Acacia Mining (ACA) 442.60p 10.65%
Centamin (DI) (CEY) 130.90p 8.81%
Polymetal International (POLY) 961.50p 4.40%
JPMorgan Emerging Markets Inv Trust (JMG) 604.00p 1.85%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 515.50p 1.78%
Personal Assets Trust (PNL) 37,890.00p 1.58%
Templeton Emerging Markets Inv Trust (TEM) 480.00p 1.48%
Drax Group (DRX) 299.10p 1.01%
Pennon Group (PNN) 858.50p 0.76%
International Public Partnerships Ltd. (INPP) 149.00p 0.27%

FTSE 250 - Fallers

Shawbrook Group (SHAW) 168.60p -27.64%
OneSavings Bank (OSB) 204.40p -22.40%
Virgin Money Holdings (UK) (VM.) 223.30p -18.89%
Morgan Advanced Materials (MGAM) 208.20p -17.93%
Countryside Properties (CSP) 183.20p -17.22%
CYBG (CYBG) 210.00p -16.00%
Redrow (RDW) 291.20p -15.59%
Howden Joinery Group (HWDN) 354.80p -14.92%
Galliford Try (GFRD) 892.00p -14.23%
Crest Nicholson Holdings (CRST) 369.00p -14.19%