U.S. Markets

European bourses sink as Brexit crisis unfolds

LONDON (Reuters) - European shares reversed early morning gains and fell to two-week lows on Thursday in a broad-based selloff as British Prime Minister Theresa May’s government was plunged into crisis over Brexit.

The resignation of ministers including Brexit Secretary Dominic Raab triggered a retreat among London-listed banks and housebuilders and spilled over to other European trading centers.

Falls in the pounds gave an accounting edge to British exporters and blue chips with revenues in foreign currencies, and the FTSE .FTSE ended the day on a 0.06 percent gain.

The FTSE 250 .FTMC, whose constituents are much more domestically focused, was down 1.3 percent.

The Dublin bourse .ISEQ suffered its worst hit since 2016 with a 3.8 percent fall as investors took the view that the Irish economy would the most impacted if Britain left the European Union without a deal.

The Euro Stoxx index .STOXXE was down 0.7 percent with German, Spanish and French markets firmly in negative territory.

“The Brexit news acted as a catalyst .... I think that what investors are acting upon is uncertainty,” said Stephane Barbier de la Serre, a strategist for Makor Capital Markets, while noting that markets had suffered but not collapsed.

The Travel and Leisure sector .SXTP was the worst hit, losing 2.5 percent with Easyjet EZJ.L and Ryanair both losing 6.6 percent.

Reporting by Josephine Mason, Editing by William Maclean and John Stonestreet