UK FTSE 100

The UK equity index lost 3.1 percent on the day immediately following the vote. On Monday, which represented a bottom in most equity markets, the index fell a further 2.6 percent. Up to Tuesday this week the index is 3.3 percent higher than pre-Brexit levels.

This remarkable performance by the FTSE 100 relates to the fact that the Index has a high allocation to the commodity sector. This sector has performed very well as commodity prices remained relatively stable while the US dollar, which is the currency in which commodities trade, strengthened.

German Dax

Over the two trading days that followed the Brexit vote the German equity index lost 9.6 percent. German exporters were hit hard on a perceived deterioration of trade flows in the region. German Banks also fared badly. The Dax is currently trading 7 percent below pre-Brexit levels.

French CAC 40

The French index touched a bottom on the 27th of June. Over the two trading days the index fell 10.7 percent. Up to the time of writing the French equity index was 9.1 percent below pre-Brexit levels.

French banks were badly hit following the referendum in the UK. Societe General has fallen 27 percent since, BNP Paribas fell by 19 percent. Exposure by these Banks to peripheral countries is partly to blame.

Italian MIB

In Italy Brexit was followed shortly afterwards by a banking crisis. Debate is currently ongoing on how to handle excessive levels of non-performing loans held by Italian Banks. Brexit and Financial shares have dragged down the Italian index by over 14 percent.

Other European Indices have followed similar trends, with the European Benchmark Euro Stoxx 50 Index plunging 9.2 percent since.

This article was issued by Antoine Briffa, Investment Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

 

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