Spread betting – FTSE notches up best weekly gain since 2011 after Brexit vote

Brexit woes? Equity markets are having none of it, with the main global indices posting some of their best gains in years last week.

The FTSE 100 shrugged off the Brexit vote to rise 7.2%, its best weekly gain since 2011. The index closed on an 11-month peak at 6,577.83, well above its pre-vote level.

Across the Atlantic, the S&P 500 notched up a 3.2% gain to close at 2,101.95, after posting three straight daily gains in excess of 1% - which has happened just twice in the last five years.

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But underneath the headline rise, there have been some enormous falls for some stocks which are being conveniently ignored by bulls.

RBS slumped by a third in 5 days, while Taylor Wimpey and Persimmon were both down 30%. Meanwhile miners Randgold and Fresnillo climbed 35% or more.

The divergence of these particular stocks is reasonably easy to explain – gold and silver prices are rising while there are doubts about property prices holding up.

This sort of pattern is repeated across the FTSE 100 and FTSE 250 – at time of writing there were around 225 fallers and 125 risers across the two indices. The FTSE 250 saw a lot more fallers, but even here roughly a quarter gained last week as the index recovered some lost ground.

On the FTSE 100, there was a broadly even split between winners and losers. The difference is in the weighting of the stocks in the index. The FTSE 100 is a heavily weighted index and so reading too much into its headline number is too simple an approach for traders looking for trends since the Brexit vote.

Some of the biggest gainers are also those with the strongest weighting – (at time of writing)

Shire PLC – up 16%, weighting 2.4%

AstraZeneca – up 15%, weighting 3.33%

British American Tobacco, up 15%, weighting 5.33%

Diageo, 15% gain, weighting 3.11%

BP – up 14.8%, weighting 4.82%

Unilever – up 14%, weighting 2.56%

Royal Dutch Shell  A – up 11.8%, weighting 5.12%

RDS B – 10% gain, weighting 4.6% 

GSK – up 12%, weighting 4.56%

Vodafone – up 6%, weighting 3.57%

HSBC – up 4%, weighting 5.45%

While the largest fallers have only a small effect on the index because of their smaller weighting –

RBS – down 32.5%, weighting 0.33%

Taylor Wimpey, down 30%, weighting 0.27%

Persimmon – down 30%, weighting 0.28%

Barratt – down 30%, weighting 0.24%

IAG – down 28%, weighting 0.39%

EasyJet – Down 28%, weighting 0.16%

Travis Perkins – down 25%, weighting 0.21%

Overall, the heavier weighted stocks tend to be risers, while the fallers are primarily made up of stocks with a low index weighting. Even HSBC – the blue chip’s biggest hitter with a weighting in excess of 5% - managed to rise as counterparts RBS, Lloyds and Barclays came under pressure.

Among the fallers, only BT and Lloyds have a weighting above 2%. All the other plus-2% stocks – the big hitters – were risers.

In the FTSE 250, a similar, though less pronounced, pattern can be discerned. Twice as many stocks with an index weighting above 1% were risers as the number of fallers in this bracket.