Brexit hits UK-linked Indian companies, Tata Motors dips 13%

Shares of companies with exposure to the UK witnessed massive selling pressure in early trade, plunging up to 13 per cent, following the UK’s vote to exit the European Union.

Reacting to this, shares of Tata Motors slumped 12.9 per cent and Tata Steel tanked 10.89 per cent on BSE as reports from the UK showed Britain voting against remaining in the EU block. These stocks were the worst hit among the 30-Sensex bluechips during the morning trade.

Shares of Hindalco declined 9.44 per cent, Bharat Forge tumbled 8.76 per cent and Dr Reddy’s Lab slipped 2.64 per cent. From the IT pack, TCS went down by 4.81 per cent, Infosys fell by 4.33 per cent and Wipro dipped 2.77 per cent. The benchmark BSE Sensex was trading with a heavy loss of 999.62 points or 3.69 per cent to 26,004.51 during the late morning trade.

In a historic development, the UK has voted to leave the European Union after 43 years as the ‘Brexit’ camp today took a seemingly unassailable lead over the ‘Remain’ camp in a down-to-wire referendum with far reaching implications for the world.

“There might be a short-term knee-jerk reaction to “Brexit” as it may lead to some volatility in the global market owing to some uncertainty linked to the future of EU,” said Ankit Agarwal, Fund Manager, Centrum Broking Ltd.

According to reports, Indian IT companies get anywhere between 6-18 per cent of their revenues from the UK, which has traditionally been the gateway for them to Europe.

There are fears that the UK operations of several Indian companies might take a hit due to immigration and other restrictions that might come in because of Brexit.