Barclays Share News (BARC)

LONDON (Alliance News) - London-listed stocks and the pound extended their losses Monday, as fears surrounding the UK exit from the European Union continued to weigh on investor sentiment despite soothing comments from UK politicians.

Chancellor of the Exchequer George Osborne said the UK economy is strong enough to face the future, but needs to adjust to the new situation.

"Britain is ready to confront what the future holds for us from a position of strength," Osborne said in his first public remarks since Britons voted to leave the EU last week.

Later in the day Prime Minister David Cameron said Britain must first "determine the kind of relationship we want with the EU" before invoking Article 50 of the Lisbon Treaty.

Housebuilders and banking stocks were again the worst performers in London's main stock indices, just as they had been on Friday in the immediate aftermath of the Brexit vote.

Barratt Developments closed down 19%, Barclays down 17%, and Royal Bank of Scotland Group down 15%.

In a note Monday, Societe Generale cut its rating on state backed RBS to Sell from Hold, saying it is worst positioned for life after Brexit. SocGen said RBS's "lower level of profitability gives it less scope to absorb bumps in the road".

Gold miners again outperformed as investors flocked to gold. The price of gold traded at USD1,320.10 an ounce by the London stock market close, a touch higher than the USD1,317.55 seen at the close on Friday.

This helped Randgold Resources rise 9.0%, and Fresnillo up 7.0%, while in the FTSE 250 Acacia Mining ended up 10%, and Centamin up 8.2%.

The price of Brent crude fell to USD47.15 a barrel at the London close, versus USD48.72 on Friday.

The FTSE 100 closed down 2.6%, or 156.49 points, at 5,982.20. The FTSE 250 ended down 7.0%, or 1,120.19 points, at 14,967.86, its lowest close since October 2014. The AIM All-Share down 3.8%, or 26.85 points, at 676.96.

Brexit concerns caused the pound to hit a new 31 year low against the dollar at USD1.3118 and by the London stock market close traded at USD1.3207. This was significantly lower than the USD1.3625 seen at the close on Friday.

The euro traded the dollar at USD1.0999, lower than the USD1.1115 seen at the close on Friday.

European indices also incurred heavy losses. The CAC 40 in Paris and the DAX 30 in Frankfurt both closed down 3.0%.

On Wall Street at the London close, the DJIA was down 1.5%, the S&P 500 was down 1.8%, and the Nasdaq Composite was down 2.4%.

In UK corporate news, easyJet said pretax profit in its fiscal third quarter will be lower year-on-year following flight cancellations and the Egyptair tragedy, and said the outcome of the UK's EU referendum will hit revenue per seat in the second half of the year.

The low-cost airline said it has experienced 1,061 cancellations so far in the third quarter to the end of June, due to a significant number of disruptive events including air traffic control strikes in France, runway and congestion issues at Gatwick airport, and severe weather conditions.

In addition, the UK's decision to leave the EU will contribute to further economic and consumer uncertainty this summer, easyJet said, leading to an expected mid-single digit fall in revenue per seat at constant currency in the second half of the financial year, year-on-year.

On top of this, recent movements in fuel prices and exchange rates are now expected to add around GBP25 million of additional costs in the year to its previous guidance.

The profit warning caused easyJet shares to end down 23%, the worst performer in the FTSE 100, having reached its lowest level in over three years earlier in trade.

Sepura said late Monday that it has raised GBP65 million in a share placing to strengthen its balance sheet and support its growth strategy, as it reported a swing to a pretax loss for its recently ended financial year.

For the year to April 1, Sepura reported a pretax loss of EUR19.0 million, swung from a pretax profit of EUR16.7 million, on revenue of EUR189.7 million, up from EUR131.2 million.

This was mostly as a result of one-off costs of EUR26.6 million related to its acquisition of Teltronic SAU, and subsequent restructuring costs, amongst others.

Sepura has raised GBP65 million through the placing of 185.7 million at 35 pence, a 53% discount to its closing price of 75.00 pence Friday. Shares in Sepura ended down 28% at 54.00 pence Monday.

Foxtons Group was one of the biggest fallers in the FTSE All-Share, down 23%, after it said the EU vote will add to the already-uncertain conditions in the London residential property market.

The London-focused estate agent said it is too early to accurately predict what impact Brexit will have on London property sales, but it said the upturn it had been anticipating in the second half is now unlikely to materialise.

As a result, revenue and adjusted earnings before interest, taxation, depreciation and amortisation will be "significantly lower" year-on-year in 2016, as challenging conditions continue through the remainder of the year.

"Looking further ahead, we remain confident on the attractiveness of the London property sales markets and our strategy to focus on the outer London mid-market segment. Furthermore, our strong lettings business provides strong downside protection," said Foxtons Chief Executive Nic Budden.

Still ahead in the economic calendar, European Central Bank President Mario Draghi will be speaking at the ECB forum in Portugal at 1830 BST. Draghi will also be speaking again at the forum at 0900 BST on Tuesday.

Also on Tuesday is the Confederation of British Industry distributive trades survey at 1100 BST. US first quarter GDP is at 1330 BST at the same time as personal consumption expenditure. At 1400 BST is S&P/Case-Shiller home price indices at 1400 BST, followed by consumer confidence and the Richmond Fed manufacturing index at 1500 BST.

In the UK corporate calendar, FTSE 250 grocery delivery company Ocado Group provides half-year results. There are also full-year results from carpet retailer Carpetright, vehicle hire company Northgate, while social housing and care services provider Mears Group issues a trading statement.

Cruise operator Carnival reports second quarter results at 1500 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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