Rolls-Royce shares boosted by cheap export hopes as 20 stocks manage to overcome torrid day's trading for the FTSE 100

  • Weak pound will make Rolls products more attractive to customers abroad
  • But there are still doubts about Roll's future in the UK after the Brexit vote
  • Bank stocks crash amid fears they could lose access to the single market
  • WPP chief Sorrell added Brexit vote 'is not good news, to say the least'

Leading British engineer Rolls-Royce saw its share price rise today as investors bet that a weakened sterling would boost its exports.

That made it one of 20 stocks on the blue-chip FTSE 100 index to rise amid a generally torrid day's trading as the stock market was routed by the Brexit vote and Prime Minister David Cameron's resignation.

Analysts also reckoned that its strong customer base in the US should ensure it is not so heavily damaged from the fallout of leaving the EU.

The Derby-based company, which has been plagued by profit-warnings and falling share price, has been a bright spark in a bad day for UK shares, along with a handful of gold miners and pharmaceutical stocks.

Bright spot: A weaker pound will make the company¿s products cheaper for foreign buyers in the US

Bright spot: A weaker pound will make the company's products cheaper for foreign buyers in the US

Earlier this week expert stock pickers told investors to plough money into companies that earn the bulk of their profits overseas or are currency hedged in such a way that a fall in the pound would be a benefit. 

Analysts at JP Morgan added that the fall in sterling after Lehman Brothers collapsed was a major factor in Rolls' 2009 share price rally, and the same effect could be happening now. 

Shares in Rolls Royce closed 1 per cent higher at 649.5p.  

Rolls Royce chief executive, Warren East said: 'It is important to remember that Rolls-Royce is a global company: two-thirds of our revenue and three-quarters of our order book is generated outside the European Union, so the UK's decision will have no immediate impact on our day-to-day business.

'The medium and long-term effect will depend upon the relationships that are established between the UK, the EU and the rest of the world over the coming years.' 

Before the referendum East had warned that investment decisions at the firm - including a new £65million test bed at its civil aerospace site at Sinfin - may have to be put on hold in the event of Brexit. 

Today he added: 'We respect the verdict of the electorate, although this is not the outcome we would have chosen.  

'As we have said before, whatever the outcome of the referendum Rolls-Royce will remain committed to the United Kingdom where we have been headquartered for more than a century, where we have a talented and committed workforce and where we carry out the lion's share of our research and development.' 

But Sandy Morris, an analyst at Jefferies, was skeptical about Roll's future in the UK.

Morris said: 'It will be fascinating to see if Rolls leaves its research in the UK once we are out of Europe. 

'It doesn't really matter where the company assembles its engines - whether it's Derby, Germany of Singapore, that's not the highest cost for the company, the R&D is.' 

Shock: Sir Martin Sorrell, the founder and chief executive of advertising giant WPP, has said a Brexit vote 'is not good news, to say the least'

Shock: Sir Martin Sorrell, the founder and chief executive of advertising giant WPP, has said a Brexit vote 'is not good news, to say the least'

Other stocks to survive the session's whitewash included gold miners.

With gold racing to its highest in more than two-years, hitting $1,358 an ounce, Randgold Resources, the precious metals miner surged 14.0 per cent to 7,315.0p, while Fresnillo, the Mexican gold explorer, jumped 12 per cent to 1,399.0p.

Investors also sought out defensive stocks with British American Tobacco edging up 4 per cent to 4,431.5, while pharmaceutical companies also rallied. 

GlaxoSmithKline rose 5 per cent to 1,497.0p and AstraZeneca climbed 4 per cent at 4,058.0p .

But for most investors this session has been one to forget.

Bank stocks have crashed amid fears they could lose access to the European single market from their bases in London.

Workers in the Square Mile have also braced themselves for months of pain after JP Morgan, HSBC and Goldman Sachs all said prior to the vote that thousands of jobs in the City of London could be moved to the continent in the event of Brexit. 

According to reports Morgan Stanley has already begun the process of moving about 2,000 of its London-based investment banking staff to Dublin or Frankfurt. 

As a result Lloyds was down 21 per cent at 56.0p, while the Royal Bank of Scotland has slumped 17 per cent to 207.0p and Barclays has tumbled 19.6 per cent at 150.2p.

Other blue chips to suffer include British Airways owner IAG, after it downgraded its earnings growth forecast for this year amid expected volatility after the referendum.

It shares have plummeted 20 per cent and stand at 417.2p.

Meanwhile the world's second largest aircraft maker - Airbus - also chipped in with its own damning verdict.

Tom Enders, chief executive, said: 'I hope the divorce will proceed with a view on minimising economic damage to all impacted by the Brexit.

'Of course we will review our UK investment strategy, like everybody else will.'

At the same time the world's second biggest telecoms company - Vodafone - said it was too soon to form a view on where the UK-based company would be domiciled after Britain voted to leave the European Union.

The group said it was committed to supporting its British customers now and in the future, but added: 'It is too soon to form a view on the implications of the referendum outcome for the domicile of the group.' 

Sir Martin Sorrell, the founder and chief executive of advertising giant WPP, also chipped in as shares in the firm dropped 3 per cent at 1,542.0p. 

He said: 'Very disappointed, but the electorate has spoken. The resulting uncertainty, which will be considerable, will obviously slow decision-making and deter activity. 

'This is not good news, to say the least. The PM's resignation clearly adds to the uncertainty. However, we must deploy that stiff upper lip and make the best of it. 

'Four of WPP's top ten markets are in Western Continental Europe and we must build our presence there even further.'

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