Investors have rushed to take advantage of falling markets, with AJ Bell reporting three-quarters of its day’s trading being buys, as it sees trading increase five-fold.
Data from AJ Bell and Hargreaves Lansdown shows investors have rushed to buy banks and housebuilders, aiming to profit from market falls that saw the FTSE drop 8 per cent today.
AJ Bell says trading on its platform is five times the usual daily amount, with 74 per cent of the trades being buys compared to 26 per cent of sells.
Investors had increased new cash deposits by 50 per cent in the three days leading up to the referendum, says AJ Bell, highlighting that investors were preparing to profit from any market falls.
Lloyds and Barclays accounted for 17 per cent of all purchases on the platform, following a 20 per cent fall in the companies’ share prices.
Hargreaves Lansdown saw similar trading activity, with hard hit financial firms such as Lloyds, Barclays, Legal and General, Aviva, and Royal Bank of Scotland being among the top 10 most bought stocks.
Laith Khalaf, senior analyst at Hargreaves Lansdown, says: “The Footsie has been bailed out by the sterling collapse, because all its international revenues streams are now worth that much more in pounds and pence.
“Financials and house builders are bearing the brunt of the pain, with Lloyds bank being one of the biggest fallers. It’s probably safe to say the public sale of the bank is now firmly in the long grass, and the return to full private ownership of both Lloyds and RBS has been knocked off course.”
Russ Mould, investment director at AJ Bell, says: “These figures suggest investors are taking advantage of short-term volatility to snap up some bargains. Market volatility driven by sentiment rather than company fundamentals is normally short-term and many investors seem to be focusing on what really drives share price valuations over the long term: profits and cashflow growth.”
Khalaf adds that tracker funds have seen a flood of money invested in them, as “investors have simply sought blanket market exposure”.
Trusted brand names have topped the most-bought funds list, including Woodford Equity Income, Lindsell Train UK Equity, Fundsmith Equity and Marlborough Multi Cap Income.
Top 10 shares purchased