UK bank stocks are cratering after Brexit chaos rumbles Theresa May's government

Markets InsiderBarclays stock crashes on Brexit news

  • Barclays, RBS, and Lloyds, some of the UK’s largest lenders, crash more than 4.5% after Theresa May’s Brexit plan failed to win over her party, and the market.
  • Top ministers have resigned, the Prime Minister faces a vote of no-confidence, and the pound fell more than 1.6%.

UK bank stocks tanked after Prime Minister Theresa May failed to win over her party or investors with her Brexit plan.

Royal Bank of Scotland is trading down 9.1%, Lloyds dropped 6.1%, while Barclays fell 4.9%. Those companies, along with shares of British homebuilders, were among the biggest decliners in the European benchmark Stoxx 600 Index. Barclays at one point touched levels not seen since June 2016, the month of the Brexit vote.

“The market has taken a big red pen to stocks which are heavily exposed to the UK economy like the banks, retailers and housebuilders,” according to Laith Khalaf, senior analyst at Hargreaves Lansdown. “The potential for an orderly Brexit to unravel in the next few days is causing further distress.”

May’s job is on the line following a tense session in the House of Commons Thursday. Key Cabinet members resigned in protest, including Brexit Secretary Dominic Raab, Work and Pensions Secretary Esther McVey, and some other Conservative ministers.

UK homebuilders and financial firms, alongside other UK exposed stocks, took a hit today with Legal & General and Persimmon the worst affected. Budget airline Easyjet is also down 6.8%, on fears the carrier might have to stop flying some routes in the event of a no-deal Brexit.

The pound traded as low as 1.8% down after the resignations, and sits 1.6% lower as of 2.55 p.m. (9.55 a.m. EST).

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.