Prime minister Theresa May's decision to withdraw the vote on her Brexit agreement created additional volatility but may represent an opportunity for investors, according to Donald Maxwell-Scott, technical investment manager at Rowan Dartington.
Sterling fell sharply in the immediate aftermath of the vote announcement, and the shares of companies such as house builders suffered, but Mr Maxwell-Scott said: “Ongoing Brexit uncertainty means investors should still be cautious, but given the recent falls in the UK stock market, there are always opportunities.
"The FTSE 100 has over 30 stocks that yield 5 per cent or more. While that is not a perfect indication, but it does illustrate that fundamentals are always the more important catalyst."
Helal Miah, investment research analyst at the Share Centre, said following Mrs May's statement to the Commons, the stock market lurched lower although he added this may also be partly explained by the US markets heading further down on trade worries.
Mr Miah said: "The rise in some of the 'Brexit Proof' shares, namely the multi-national pharmas, gold miners, tobacco and consumer staple stocks were not enough to overcome the wider market sentiment.
"However, a better barometer of investor sentiment is sterling, which has been aggressively sold off and breached below $1.26 and reaching levels last seen in early 2017.
"Faith in the prime minister is already low, but given that she promised last week that the vote will go ahead, only to reverse course the day before, will no doubt sow more seeds of discontent with potential for more MP’s calling for her resignation.
"It is extremely difficult to make any prediction on the stock market and the pound; the only thing we can guarantee is more volatility which will provide opportunities for short term traders.
"For longer term investors, staying put may be the best thing to do."
Richard Buxton, who runs the £2bn Merian UK Alpha fund, said he continues to believe that a deal will be agreed, but added he has not taken advantage of recent share price falls to go on a buying spree, as he tries to examine the outlook on a three-year basis.
david.thorpe@ft.com
