(REPEATS for additional subscribers (ADVISORY- Follow European
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* FTSE 100 vs FTSE 250: reut.rs/28XsrMt
* FTSE 250 down over 10 pct in last two days
* FTSE 250 most exposed to fears of UK recession
* OneSavings, Shawbrook, Virgin Money shares slump
By Sudip Kar-Gupta
LONDON, June 27 Shares in domestically focused
mid-size British companies suffered the heaviest selling among
European stocks on Monday as increasing worries over economic
growth after last week's Brexit sent investors rushing for the
The FTSE 250 mid-cap index tumbled 6 percent,
outstripping the 2 percent drop on the blue-chip FTSE 100
equity index and a 3.1 percent fall on the broader,
pan-European STOXX 600 index.
The mid-cap index was also at its lowest level since late
The FTSE 250 companies are more reliant on the domestic
economy and consumer spending than the large, multinational
companies that dominate the FTSE 100, who may even benefit from
the post-Brexit slump in sterling as a weaker pound makes their
exports more affordable overseas.
The 250 index slumped 7.2 percent on Friday in the immediate
aftermath of Britain's vote to leave the European Union.
Monday's decline wiped another 22 billion pounds ($29
billion) off the value of companies in the index.
While the weaker pound may buoy exporters, it could weaken
domestic consumer confidence in Britain and thereby hurt the
companies in the FTSE 250.
"The reaction of the FTSE 250 companies shows how fears are
building up about a British economic recession," said Horizon
Stockbroking director Kyri Kangellaris.
This was reflected on Monday in slumps in property and
housebuilding shares, which in turn hit domestically focused
British banks that typically rely on consumer loans and mortgage
"We expect that lower confidence and house prices will
temper loan demand," said RBC Europe analyst Robert Noble.
Mid-cap banks OneSavings, Shawbrook and
Virgin Money all fell more than 20 percent.
Mid-cap housebuilding and construction companies such as
Bellway, Crest Nicholson and Marshalls
also lost around a fifth of their stock market value.
Shares in London-based estate agency Foxtons also
dropped 20 percent, after Foxtons said Britain's decision to
leave the EU was likely to prolong uncertainty in the property
Another victim from fears about the hit to the UK economy
was furniture retailer DFS, which slid 17 percent.
Analysts at brokerage N+1 Singer said they were re-assessing
earlier bullish calls on the UK housing and retail sectors.
"At the start of the year, we talked about selective
continued strength in the housing market, the strength in
construction markets and resilient consumer/retail markets - the
Brexit vote calls these assumptions increasingly into question."
($1 = 0.7597 pounds)
(Reporting by Sudip Kar-Gupta; Editing by Vikram Subhedar and