Stocks fall with pound but sterling “might be close to floor”

Stocks fell on Monday, as did sterling, amid concerns that UK Prime Minister Theresa May is prepared to lead Britain out of the European Union’s single market.

The STOXX Europe 600 fell 0.9 percent. The British pound fell 1.1 percent lower to US$1.2052 after touching US$1.1986, its weakest level since October.

“Markets are trading in risk aversion mode,” said Neil Jones, the head of hedge-fund sales at Mizuho Bank in London.

Earlier in Asia, the Nikkei 225 fell 1.0 percent.

Nothwithstanding the fall on Monday, Marcus Ashworth at Bloomberg thinks that sterling can survive Britain's exit from the European Union.

“Monday saw the pound dip to its weakest versus the euro since November and fall briefly below $1.20, the lowest level since the Oct. 7 flash crash,” he wrote. “If this constitutes the bulk of the hard Brexit news, we just might be close to the floor for sterling versus the euro.”