ears of a no-deal Brexit were rising in the City today after the pound fell and jittery traders sent housebuilding and consumer-focused stocks sharply lower.
Sterling was trading at 1.32 against the US dollar, a fall of 1.5% as this week’s deadline for an EU trade deal loomed into view with few signs of weekend progress. Sterling volatility was also reported to be at its highest level in eight months.
While the FTSE 100 index held firm at its recent nine-month high, this masked some big individual falls as investors took flight from stocks with the greatest Brexit risk.
Housebuilders Berkeley and Persimmon were most impacted after dropping by as much as 6% — 313p to 4,451p and 123p to 2,745p respectively. December’s strong start for Lloyds Banking Group also reversed following a drop of 3% or 1.3p to 37.7p.
Other lenders trading more than 2% lower included NatWest and Barclays, while property firms Land Securities and British Land were 3% cheaper.
Defensive stocks offered investors some refuge as British American Tobacco climbed 106.5p to 2,827.5p and Guinness drinks giant Diageo added 57.5p to 2990p. With heavyweights including AstraZeneca and Vodafone also higher, the FTSE 100 index added 18.4 points to 6568.5.
The domestic-focused FTSE 250 index provided a more accurate reflection of the Brexit state-of-play after giving up recent progress with a decline of 141.03 points to 20,041.66.
Housebuilders including Crest Nicholson, Vistry and Bellway fell by more than 4%, while buy-to-let lender Paragon Banking Group dropped 21.4p to 446.2p. Broadcaster ITV was 4p cheaper at 97.92p.
A brighter note in the FTSE 250 came from software company Micro Focus International, which continued its recent spectacular run with a further gain of 16% or 67.4p to 498p.
The former blue-chip stock, which helps clients to bridge existing and emerging technologies, has now risen by 130% since the start of November.
Its shares had once been as high as 3,000p but crashed in value in the wake of an ill-fated deal in 2017 to buy the software segment of Hewlett-Packard Enterprise for $8.8 billion.
As well as turnaround progress, sentiment has been boosted by Amazon naming Micro Focus as one of four technology partners to help businesses migrate to its cloud platform.