The City reacts to Brexit: Initial panic subsides

The FTSE 100 has fallen 3.2% today following the UK’s vote to leave the EU, wiping more than £50bn off the value of UK shares but recovering from catestrophic early falls.

Close of trading update: The FTSE 100 ended the day 3.2% down at 6,138.7pts after staging a recovery through the day from the low of 5,788.8pts in early trading. The index reached 6,227pts in mid-afternoon before sliding back slightly in the final hour of trading.

Most stocks remained in the red, but there were some notable risers by close of trading - including Diageo, up 3.8% to 1,903p, British American Tobacco, up 3.8% to 4,436p and Unilever, up 2.5% to 3,265.5p.

Luncthime update: At the time of writing the index is 318 points down to 6,020.1pts, having dropped as low as 5,788.8pts when the market opened. The fall is currently in the top 20 daily share price drops in UK history, but the market is still higher than it was just ten days ago and is still 9.5% higher than the FTSE 100’s February year-long low of 5,499.5pts.

Unsurprisingly grocery, fmcg and leisure shares have been caught up in the sell-off – so which have been the hardest hit so far today?

See The Grocer’s full list of share price data here.

Supermarkets

The grocers have been hit hard this morning, but have largely escaped the worst of the carnage. The worst hit are Sainsbury’s (SBRY), down 7.8% to 227.2p and Tesco (TSCO), down 7.8% to 154.8p, while Morrisons (MRW) has fallen a more modest 5.8% to 178.6p and Ocado (OCDO) is 6.8% down to 235.7p.

Bernstein’s Bruno Monteyne suggested the supermarkets may be more immune than some other consumer sectors in the medium term given Brexit could ease the deflationary pressures eating into grocers’ sales and margins. “Medium to longer term, UK food retail will be more defensive,” he wrote. “Every 10% fall in the pound means 3.4% more food inflation. Retailers will be able to pass most of this on to consumers, driving LFL sales, investor sentiment and valuations.”

A note from Jefferies agreed that Tesco and Morrisons were likely to benefit from an expected hike in food inflation, but that any benefit to Sainsbury’s would offset by Argos dilution.

Monteyne added that the Argos deal meant Sainsbury’s had more Brexit exposure than Tesco and Morrisons. ”Non-food retail is a higher beta sector, more exposed to consumer sentiment and therefore changes in shopping patterns,” he said. ”The fall in the value of the £ will mean non-food sourcing by Argos will become more expensive. They may be protected by hedging arrangements in the short term but longer tem margins will be under pressure from rising prices of foreign inputs. This may be compounded by a weaker UK economy leading to fewer purchases in some categories such as consumer electricals.”

Food service

Similar to the wider leisure sector (see below) those specialising in food on the go have been particularly hard hit. Greggs (GRG) is down 9.4% to 2.6% while travel retailer SSP Group (SSPG) is down 8.3% to 293.5. Costa Coffee owner Whitbread (WTB) has dropped 8.7% to 3,827p, while WH Smith (SMWH) – which has become increasingly reliant on its travel outlet to drive sales growth – has fallen 12.7% to 1,494p

Leisure

Leisure staples of airlines and travel companies have taken a battering this morning as the pound plunged in value, but the market has also taken a dim view food and drink-related leisure firms. Worries that Brexit could lead to economic stagnation and pressure on consumers’ discretionary spent has particularly hit the eating-out sector. Pub group Mitchells & Butlers (MAB) is 16.6% down to 240.1p, Garfunkel’s-owner Restaurant Group (RTN) is 16.5% down at 292.4p, Enterprise Inns (ETI) 10.4% down to 84.3p and Greene King (GNK)10.3% down to 801p.

General retailers

It’s been a particularly tough day for non-food retailers so far as the market weighs up Brexit’s implications for their staffing, supply chains and the potential dampening effect to population growth. JD Sports (JD) has plunged 17% to 1,103.p, Halfords (HFD) is down 16.8% to 335p and Sports Direct (SPD) has dropped 16.4% to 323.9p.

Food retailers with a larger non-food sales component have been similarly hit – with Marks & Spencer (MKS) down 10.8% to 326.9p, B&M European Value Retail (BME) down 12.7% to 253.7p, and Poundland (PNLD) down 8.3% to 188p.

Online specialists ASOS (ASC) and Boohoo (BOO) are less affected, down 4.7% to 3,666p and 4.6% to 56.5p respectively.

UK-listed food suppliers

Greencore (GNC), which has moved heavily into food-to-go in recent years, is the worst affected stock in the sector, dropping 11% to 285p. CEO Patrick Coveney had warned of the difficulties in staffing and growth in ingredient prices Brexit would create for the company.

The trend is largely mirrored across the sector with shares down on worries over increased input costs. Meat supplier and exporter Cranswick (CWK) is 6.9% down to 2,089p, Dairy Crest (DCG) 6.8% down to 526.5p and Finsbury Food Group (FIF) 6% down to 110.5p.

Premier Foods (PFD) is amongst the sector’s better performers, down just 4.3% to 39.3p, while TATE & Lyle (TATE) – which was one of the few food suppliers that suggested Brexit could be beneficial – is down just 2% to 614.5p.

Multinational fmcg giants

Of the nine largest food and drink related stocks followed by The Grocer – only two are currently in the red. Associated British Foods (ABF) is down 2.9% to 2,748p largely because of the potential impact on Primark, while SABMiller (SAB) – which has shown little movement given the acceptance the AB InBev bid – has edged down 0.8% to 4,310.

Others like tobacco firms British American Tobacco (BAT) and Imperial Brands (IMB) and consumer goods giants Reckitt Benckiser (RB), Diageo (DGE) and Unilever (ULVR) are all slightly up.

Catering giant Compass Group (CPG), which warned of the damaging impact of Brexit, is 1.5% up this morning to 1,319p.

Currency rates

The pound slumped to a 20-year low against the dollar in the early hours of this morning, dropping to below $1.33 before recovering as the day went on to $1.38, but still well down on the rate of almost $1.50 as the polls closed last night.