Stocks across the globe extended losses as the day progressed, as a ‘risk off’ sentiment following investors’ re-evaluation of Brexit prompted yields on US, UK and Japanese government bonds to hit records lows. This followed an early morning(3.00am GMT) sell off in Sterling against both the euro and the dollar, falling over 1% against both currencies with the yen regarded as the currency safe haven of choice.
The risk off sentiment provoked a further gold rush, pushing miners listed on London indices higher as investors piled into gold, pushing the price to US$1,369.02/oz. Hochschild and Centamin were boosted by double digit gains as Acacia Mining, Vedanta & Fresnillo posted large single digit gains.
Despite a rally in these stocks, a typically large weighted component of the FTSE 100 index, the FTSE 100 still struggled as it traded 1.25% lower. Travel groups and supermarkets proved to weigh on the index as International Consolidated Airlines sunk(-7.28%) along with easyjet(-3.6%). This was as both operators reported improved load factors to varying degrees, among other improving metrics, but target prices were slashed on both stocks by Barclays due to Brexit worries. Tesco(-8.06%) and Wm Morrisons(-7.15%) suffered a similar fate, this time as HSBC downgraded both stocks and removed Tesco from its ‘Europe Super Ten List’.
At the close European indices were down with the FTSE 100 -1.25%, with the CAC 40 -1.88%, and the DAX 30 -1.67%.
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