“Accepting around £3 billion in a Bank of England liquidity auction this morning, the UK’s banking sector is looking a bit rosier after having the colour completely drain from its face at the start of the week”.
Advertisement
We have contingency plans.
The biggest FTSE 100 underperformer, EasyJet, saw its shares plummet by 18.4% to 1073.62p at the time of publication.
The pound has continued to drop against the U.S. dollar as trading reopened after Friday’s record crash.
“A vote by Britain to leave the European Union can hardly help a company like easyJet, particularly seeing as the fall in the pound will put Britons off travelling overseas”, he said.
The FTSE 100 (INDEXFTSE:UKX) jumped higher after the opening bell on Tuesday, after two tumultuous days in which it fell almost 6%.
The mid-cap FTSE 250 rose 3.6 per cent after the domestically-focused index’s 13.7 percent slump since Thursday. However, such was the appreciation of the dollar and the yen against the pound, that most United Kingdom investors would actually have seen a positive return from investment in these markets.
Meanwhile, 10-year gilt yields have fallen below 1% for the first time ever in their history as investors seek the safety of government bonds.
In a statement issued before the United Kingdom stock market opened, Chancellor George Osborne said the United Kingdom was ready to face the future “from a position of strength”.
At the same time, oil prices advanced, with West Texas Intermediate up 2.7% to $47.59 a barrel and Brent crude up 2.5% at $48.35.
Addressing Brexit issues, chancellor George Osborne said yesterday: “The markets will move up and down as you’ve seen in the past 24 hours – we are in a period of prolonged adjustment”. “Despite the prime minister’s resignation and a swathe of Labour shadow cabinet departures, [Mr] Osborne doesn’t appear to be going anywhere”.
The EU referendum vote has had a fairly substantial effect on different asset classes, though in some cases perhaps not as dramatic as predicted. “The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year”. “We expect that lower confidence and house prices will temper loan demand”, said RBC Europe analyst Robert Noble.
Following Friday’s eight percent fall, Japan’s Nikkei closed over two percent higher on Monday backed by warnings from Japanese officials they may intervene in the currency markets to stabilize the yen.
The gold price fell slightly but Morgan Stanley analysts upgraded their price expectations for the precious metal by 8% next year as the impact of the Brexit lingers.
Osborne added the United Kingdom has “dealt with the immediate challenge of an unexpected vote as far as financial markets are concerned”.
The declines witnessed on both Friday and Monday meant nearly £100bn had been wiped from its market value since the referendum result was known.
Advertisement
More than £40 billion has been added to the value of Britain’s biggest companies after the financial markets staged a fightback following punishing falls in the wake of the Brexit vote.
