London’s blue chip index started on the back foot this morning, dropping 0.2% or 17 points to 6,505.
Analysts had expected the FTSE 100 to start relatively flat. Yesterday’s construction Purchasing Managers' Index (PMI) did nothing to settle the markets, dropping to a seven year low of 46, compared to highs of 52 in May.
After an initial rise following an upbeat trading statement, Persimmon PLC (LON:PSN) was down 5%, falling along with other UK house builders.
Standard Life Investments suspended trading in its UK property fund yesterday, citing “exceptional market circumstances” following Brexit.
"The suspension was requested to protect the interests of all investors in the fund," it said in a statement, after its investment arm wrote down the value of the £2.9bn fund by 5% last week.
The news hit Standard Life PLC (LON:SL.) and other pension specialists such as Legal & General PLC (LON:LGEN), Purdential PLC (LON:PRU) and JRP Group (LON:JRP) - the company formerly known as Just Retirement.
UK Services PMI is out this morning; a small drop is expected as firms halted operations in the week leading up to the vote.
The top winner was British and American Tobacco PLC (LON:BATS), up 46 pence or just under 1% to 4,950p. Yesterday, Credit Suisse upped its target price to 5,000p.
The biggest loser was Fresnillo PLC (LON:FRES), down 90 pence or just under 5% to 1,805p. The precious metals miner topped the FTSE 100 only yesterday as silver prices hit a two-year high.
The FTSE 250 index fell 2% or around 300 points to 15,801.
Over in the US, trading in commercial and financial stocks will resume after the public holiday yesterday. Trading remained relatively flat.
Overnight the five day rally seen in the Asia markets snapped as cautious investors in the equity markets cashed in profits despite hopes an increased central bank stimulus would offset a downturn following Brexit.
Back in the UK, Governor of the Bank of England Mark Carney will be giving a statement at 10.30am this morning on the Bank’s financial stability report.
Chancellor George Osborne is to meet with bank bosses later to discuss the country’s response to Brexit.
- Brent crude was down below US$50 a barrel. Estimates showed Nigerian production rose last month following repairs to damage caused by militant attacks.
- Gold was up 0.6% to US$1,344 per oz.
- Silver’s highs were beginning to falter, down to US$19.9 per oz after peaking at US$20 yesterday.
- The British pound was down against the dollar at around US$1.32 to the £1.