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London stocks cut losses on Cameron resignation

Source: AFP | June 24, 2016, Friday | Online Edition

LONDON stocks plunged in early deals on Friday but pared losses significantly as British Prime Minister David Cameron announced his resignation after Britain voted to leave the EU.

The capital's benchmark FTSE 100 index of top companies shed more than eight percent in initial trade.

The market clawed back some ground however after Cameron -- who had backed the failed "Remain" campaign -- said he would stand down.

At about 0745 GMT, the FTSE stood at 6,030.93 points, down 4.85 percent from Thursday's closing level.

"The markets have reacted rather well to Cameron stepping down," Spreadex analyst Connor Campbell told AFP.

"It is likely that the speed of the decision, and the time frame of him remaining leader until the autumn, has introduced a crumb of much needed stability."

Cameron promised to try to "steady the ship" over the next months and did not give a precise timetable for his departure but said a new leader should be installed by early October.

In opening London deals, share prices of banks and housebuilders had collapsed by about a third, but also won back some ground in later trade.

Housebuilder Taylor Wimpey was down 21 percent, and Barclays and Royal Bank of Scotland were each shedding roughly 20 percent.

"After a once-in-a-lifetime shock like this it will take markets time to find the right level," said Lee Wild, head of equity strategy at stockbroker Interactive Investor.

"Buyers stood back first thing and let sellers do the work. Initially, at least, a third off the price of banks and housebuilders looks harsh, and it's proved too tempting for some investors."

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