Thursday 8 December 2016

Irish stock market in freefall as UK bank stocks plunge

Published 27/06/2016 | 15:43

Stock photo: Irochka - Fotolia
Stock photo: Irochka - Fotolia

Trading in UK bank stocks was briefly halted this morning as stock markets continued to plunge on the back of the Brexit vote.

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So-called circuit breakers – automatic mechanisms for suspending trading in a share of there’s extreme volatility – kicked in on the London market on more than one occasion as shares in Barclays and Royal Bank of Scotland collapsed 18pc. Both have regained a little ground from earlier, but are still 16pc lower.

UK Chancellor George Osborne, and Boris Johnson, both sought to calm markets and investors today, but their entreaties have been roundly ignored as investors continue panic selling of stocks that began on Friday, and Sterling tests fresh lows.

The UK’s FTSE-100 index is currently down 2pc.

Shares in Ireland’s ISEQ Overall Index have been pummelled again. The index is currently 7.6pc lower, with many stocks in freefall.

Bank of Ireland has collapsed 20pc. Ryanair has sunk 10.2pc after Easyjet cut its profit forecast because of air traffic control strikes and the likely impact of the Brexit vote.

Shares in insulation maker Kingspan are 6.7pc lower. CRH has sank 7.3pc, while packaging giant Smurfit Kappa is down 6.6pc.

Sterling fell as much as 11pc against the dollar on Friday for its worst day in modern history, while $2.8 trillion was wiped off the value of world stocks - the biggest daily loss ever.

That trumped even the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987, according to Standard & Poor's Dow Jones Indices.

Mr Osborne tried to ease investors' concerns in his first public comments since the referendum. He said he was working closely with the Bank of England and officials in other leading economies for the sake of stability as Britain reshapes its relationship with the EU.

"Our economy is about as strong as it could be to confront the challenge our country now faces," he told reporters at the Treasury. "It is inevitable after Thursday's vote that Britain's economy is going to have to adjust to the new situation we find ourselves in."

Boris Johnson, a leading proponent of a Brexit and likely contender to replace Prime Minister David Cameron who resigned on Friday, praised Mr Osborne for saying "some reassuring things to the markets”.

The former London mayor said outside his home in north London that it was now clear "people's pensions are safe, the pound is stable, markets are stable. I think that is all very good news”.

But financial markets took a different view, with sterling sliding more than 3pc against the dollar to $1.3221

The yield on British 10-year government bonds fell below 1pc for the first time due to investors betting that the Brexit vote would trigger a Bank of England interest rate cut aimed at steadying the economy.

(Additional reporting: Reuters)

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