London midday: FTSE 100 outperforms as pound plumbs 30-year low

Stocks had recovered part of their initial losses come midday as analysts and traders attempted to digest the UK's historic decision to leave the European Union and to anticipate the next move in financial markets.

On Thursday, after 43 years, and in a historic referendum, the UK voted to leave the EU.

As of 11:46 BST, the Footsie was 301.50 points or 4.76% lower at 6,036.60, led by losses in homebuilders and financials such as Lloyds, but was nonetheless outperforming European equity benchmarks by a wide margin. Out on the second-tier index, it was a different story, with the FTSE 250 down by 1,498.62 points or 8.65% to 15,834.89.

Shortly before the start of trading, the Bank of England issued a statement saying that it was monitoring developments closely. The European Central Bank followed shortly afterwards with a similar message.

In another shock development, the Prime Minister announced he would step down.

Among other things, that appeared to imply that Article 50 of the Lisbon Treaty - starting the two-year countdown to formally finalise the UK's exit - would not be triggered on Friday.

Both Michael Gove and Boris Johnson had asked Cameron not to rush into a decision to trigger Article 50.

Following the referendum result, economists at HSBC cut their forecast for the rate of growth in UK gross domestic product in 2017 from 2.1% to 0.7%. They also revised their projection for CPI inflation next year to 4.0% from 1.7%.

For Simon Wells, HSBC's chief UK economist, the most prudent course of action for the Bank of England would be to let any initial panic subside and make a more considered assessment before lowering Bank Rate.

"The UK now faces a period of intense political and economic uncertainty. The voting pattern also highlighted deep divisions in opinion across the country."

Over on the Continent, shares were getting walloped, with Germany's Dax down by 7.43% or 762.07 points to 9,500.19 and the Cac-40 off by 8.83% or 394.20 points at 4,073.09.

Meanwhile, cable was lower by 7.88% at 1.3700 - having hit a 30-year low in early morning trading - while the US dollar/yen cross was off by 3.68% to 102.54. The yield on the benchmark 10-year Gilt plummeted 31 basis points to 1.06%.

Other asset classes were seeing similar moves, with front month Brent crude futures down by 5.447% to $48.28 per barrel on the NYMEX.

FTSE 100 giants express confidence in the outlook

In the long-term, IAG did not expect the UK's decision to have a "material" impact on the business but it no longer expected to register an increase in operating profits in 2016 similar to the previous year's, the company said in a statement.

Aviva did not expect the leave vote to have any significant operational impact on the company. The life insurer emphasised that its operations in the UK and its other subsidiaries in the European Union were well-capitalised and continued to trade as normal.

Deutsche Boerse and London Stock Exchange said they remained fully committed to their $30bn merger on Friday, reiterating that the outcome of the EU referendum played no part in the deal. The companies said in a joint statement that the referendum does not impact the compelling strategic rationale of the merger.

Market Movers

FTSE 100 (UKX) 6,053.36 -4.49%
FTSE 250 (MCX) 15,896.66 -8.29%
techMARK (TASX) 2,992.02 -3.38%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,750.00p 20.06%
Fresnillo (FRES) 1,395.00p 12.59%
Compass Group (CPG) 1,324.00p 1.92%
British American Tobacco (BATS) 4,344.50p 1.61%
Rolls-Royce Holdings (RR.) 653.00p 1.32%
Mediclinic International (MDC) 963.00p 1.10%
Rexam (REX) 638.50p 0.79%
Unilever (ULVR) 3,211.00p 0.77%
Imperial Brands (IMB) 3,703.50p 0.69%
ARM Holdings (ARM) 1,026.00p 0.69%

FTSE 100 - Fallers

Persimmon (PSN) 1,616.00p -22.97%
Taylor Wimpey (TW.) 149.70p -22.19%
International Consolidated Airlines Group SA (CDI) (IAG) 419.00p -20.64%
Berkeley Group Holdings (The) (BKG) 2,617.00p -20.33%
Barratt Developments (BDEV) 460.20p -20.31%
Lloyds Banking Group (LLOY) 57.50p -20.30%
Barclays (BARC) 150.05p -19.74%
British Land Company (BLND) 612.50p -19.67%
Provident Financial (PFG) 2,372.00p -18.77%
ITV (ITV) 178.10p -18.75%

FTSE 250 - Risers

Acacia Mining (ACA) 397.50p 16.23%
Centamin (DI) (CEY) 120.00p 10.19%
Polymetal International (POLY) 922.50p 5.97%
Fidelity China Special Situations (FCSS) 137.70p 0.07%
JPMorgan American Inv Trust (JAM) 292.60p -0.10%
Darty (DRTY) 169.10p -0.41%
BH Macro Ltd. GBP Shares (BHMG) 1,950.00p -0.51%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 504.50p -0.59%
Personal Assets Trust (PNL) 37,020.00p -0.67%
NMC Health (NMC) 1,203.00p -0.74%

FTSE 250 - Fallers

Derwent London (DLN) 2,598.00p -24.26%
Aldermore Group (ALD) 156.80p -23.77%
Virgin Money Holdings (UK) (VM.) 280.00p -23.58%
OneSavings Bank (OSB) 256.80p -22.95%
Crest Nicholson Holdings (CRST) 453.70p -22.44%
Countrywide (CWD) 274.00p -22.14%
McCarthy & Stone (MCS) 185.50p -22.03%
Ibstock (IBST) 155.10p -21.67%
Shawbrook Group (SHAW) 231.70p -21.46%
Bellway (BWY) 2,148.00p -21.43%