Nearly €10bn wiped off Irish stocks after Brexit result

Almost €10bn was wiped off the combined value of Irish shares yesterday, as the Irish Stock Exchange bore the brunt of investors continuing to react negatively to Britain’s decision to leave the EU.

Following its 7.7% decline in the immediate aftermath of Friday’s Brexit result, the Iseq shed another 9.9% yesterday.

While all other main European bourses fell, too, the Iseq’s decline outweighed them. 

London’s FTSE100 was down by 2.55%, while the Dax in Frankfurt fell by just over 3% and Paris’ Cac-40 index declined by 2.97%.

However, the FTSE250, a more accurate measure of the UK market, fell by almost 7% (a fall not seen since the height of the Eurozone crisis) and the Stoxx600 fell by 8%. 

Analysts had anticipated further declines. Davy Stockbrokers’ chief economist Conall MacCoille said that the political developments, seen over the weekend, “have merely added to the uncertainty”.

Dublin’s decline, yesterday, was led by the banking and property stocks. 

Bank of Ireland was down nearly 21%, Permanent TSB shed 17%, Hibernia REIT was down 4.27% and Abbey fell over 8.2%.

However, chief economist with Investec IrelandPhilip O’Sullivan said that while few would have viewed the Brexit result as positive, and yesterday’s turmoil wasn’t surprising, movements were not representative of economic fundamentals and we are unlikely to see the type of widespread carnage that accompanied the global economic collapse of 2008.

Goodbody Stockbrokers’ chief economist Dermot O’Leary said IDA Ireland moves to reiterate the country’s commitment to the EU were important and to start pitching for previously UK-bound business and companies already invested there.

“This is the only way that Ireland can approach this, as while Ireland will be hit economically in the short-term there are potential medium-term benefits for Ireland as the only English-speaking member of the EU left,” he said.

Ryanair fell by more than 15%, over €2, to €10.46 as rival Easyjet warned that air-traffic control strikes and lower consumer demand after a number of air tragedies will likely wipe €33.5m from third-quarter profits.

Elsewhere, UK banks led a gauge of European lenders to lowest levels since 2011, with RBS down 15% and Barclays sliding 17%.

The volume of European shares changing hands was two-and-a-half times the 30-day average and London analysts fear more volatility as concerns remain over the stability of the European banking sector.

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