Resource stocks made up the majority of only a handful of risers on the FTSE 100 today as investors fretted over Brexit and sterling took a beating.
The FTSE 100 closed at 6,044.97 – down 1.16 per cent on the day – and at its lowest level in three months. In March it was trading as low as 6,036, though had dropped as far as 5,536.97 in February.
The pound suffered today, falling to around eight-week lows against the dollar. Sterling was buying $1.4157, down from $1.4267 late Friday in New York as the European Union membership referendum nears and polls show the gap between sides is narrowing.
Sterling weakness could be good news for FTSE 100 companies however, benefiting many of the indexes internationally-focused companies and making shares more affordable for foreign investors.
Chris Beauchamp, of IG, said:
The atmosphere in equity markets remains decidedly cautious, as the clock ticks down to the next Fed meeting and the Brexit referendum gets ever-closer. Despite some bullish notes on UK equities from investment banks today, the pre-referendum tantrum appears to be setting in among investors.
The parallel with the Scotland vote in 2014 is eerie; as the vote looms markets have become increasingly jittery, but with IG clients still expecting a ‘Remain’ victory (with the binary currently on 68 per cent), it is still highly plausible that the market is preparing for a pleasing relief rally should the UK opt for the status quo.
Miners Fresnillo, Randgold Resources, and Rio Tinto were all winners today. Fresnillo lead the blue-chip index, up by 1.5 per cent, while Randgold and Rio climbed by 0.7 per cent and 0.5 per cent respectively.
At the other end of the table Lloyds Banking Group and emerging market focused bank Standard Chartered both racked up heavily loses. Lloyds ended down 4.2 per cent, while Standard Chartered finished 2.9 per cent lower.
Other financial stocks also performed badly. Broker Hargreaves Lansdown and asset manager Schroders both closed down 2.9 per cent.
Sky performed badly, losing 3.7 per cent from its share price.
Among mid-caps, private security firm G4S shed 4.9 per cent after it was revealed yesterday's mass shooting in Orlando, Florida, was carried out by one of its employees.