FTSE 100 could lose up to £350bn in Brexit vote, says UBS

Discussion in 'Market News' started by Lily, Jun 22, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Leading shares predicted to drop by more than 20% in worst situation

    Nearly £350bn could be wiped off the value of Britain’s top companies in the event of a vote for the UK to leave the European Union, analysts at UBS have warned.

    In a note to clients, the bank said the FTSE 100 could fall as low as 4900 in the worst case situation after a Brexit vote, the lowest level since the height of the eurozone crisis in 2011.

    Following the risk-rally of the last few days, we believe there is significant room for downside in the event of a “Leave” vote. We estimate percentage moves in the mid- teens for UK and EU equities but materially smaller moves for the S&P 500 and emerging market equities.

    In a vote to leave, the pound would come under significant pressure, while risk currencies (Swiss franc and Japanese yen) benefit. Potential policy responses limit the degree of strength. We expect the effects on euro/dollar to be relatively muted.

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