Private investors using Brexit selloff as buying opportunity, says Hargreaves Lansdown

Private investors are using Friday’s Brexit-fuelled stock market selloff as a buying opportunity, according to Hargreaves Lansdown’s senior analyst, Laith Khalaf.

He said 80% of the trades placed through HL’s share dealing service were purchases, compared to 60% on an average day.

Khalaf said: “Private investors are clearly seeing today’s market fall as a buying opportunity, and are out in force bargain-hunting. The most popular stocks are also those which have seen their prices hit hardest this morning, namely the banks and house builders.

“We know that private investors have been sitting on the sidelines until after the referendum, and early indications are there may be some buying activity now the market has dropped.”

Lloyds Banking Group, Barclays, Taylor Wimpey, Legal & General, Aviva, Persimmon, easyJet, Barratt Developments, Royal Bank of Scotland and ITV were the most popular shares bought by retail investors on Friday morning.

By 1420 BST, the FTSE 100 was trading down 3.5% at 6,115.51, still firmly in the red but well off earlier lows and outperforming its European peers.

“The FTSE 100 has been bailed out by a falling pound, but the FTSE 250 mid cap index has not been so lucky- it has fallen by over 8% by lunchtime, because it is more domestically focussed and has fewer overseas earnings,” Khalaf said. The 250 was down 8.1% at 15,935.47.

He pointed out that the FTSE 100 is above the psychologically key 6,000 level and around 10% higher than the low of 5,537 hit in February.