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Pound and property shares head lower | |
(about 1 hour later) | |
Shares in property firms dragged the FTSE 100 lower after Standard Life Investments suspended trading in its UK property fund. | |
The company blamed the move on "exceptional market circumstances" following the EU referendum result. | The company blamed the move on "exceptional market circumstances" following the EU referendum result. |
The FTSE 100 index fell 35.33 points to 6,486.93, while the FTSE 250 sank 374.05 points, or 2.3%, to 15,742.65. | |
The pound was down sharply, dropping 0.8% against the dollar to $1.3177 and down 0.9% against the euro to €1.1814. | |
Analysts are waiting for the Bank of England's latest Financial Stability Report, due out later. The Bank is expected to relax capital requirement rules for banks following the referendum result. | Analysts are waiting for the Bank of England's latest Financial Stability Report, due out later. The Bank is expected to relax capital requirement rules for banks following the referendum result. |
Property gloom | |
Among property shares, housebuilder Persimmon fell 6% despite it reporting a rise in half-year revenues. | |
The company said it was "confident" about its prospects, and that it was too early to say how the UK's vote to leave the EU would affect the sector. | |
But the news from Standard Life Investments cast a shadow across the entire property sector. Shares in Barratt Developments fell 6.2% while Land Securities dropped 5.4%. | |
Standard Life Investments said the number of investors asking to withdraw their money had increased following the EU referendum vote. | |
"The suspension was requested to protect the interests of all investors in the fund," it said in a statement. | |
The last time Standard Life stopped investors taking their money out of the fund was during the 2008 financial crisis. | |
The £2.9bn fund invests in a mixture of commercial real estate in the UK, including office blocks, shopping centres and warehouses. |