More than £6bn wiped off combined value of RBS, Lloyds and Barclays amid Brexit deal fiasco

More than £6bn has been wiped off the combined value of Barclays, Lloyds and Royal Bank of Scotland today as turmoil over Theresa May's Brexit deal hit the banking and housebuilding sectors.

The threat of a no-deal reared its head this morning after Brexit secretary Dominic Raab dramatically resigned after the Prime Minister pushed her draft withdrawal agreement through cabinet last night.

The pound has plunged 1.8 per cent to $1.276 over the course of the day and banking and housebuilding stocks followed.

RBS led the drop, falling more than nine per cent and wiping £2.76bn off its value as Lloyds slumped 5.3 per cent and Barclays 4.3 per cent.

Taylor Wimpey was the second biggest FTSE 100 faller – behind RBS – sliding 7.8 per cent as Persimmon was 7.7 per cent down and Barratt Developments tumbled 7.4 per cent.

But internationally-exposed stocks performed well amid the UK's uncertainty, with mining majors taking advantage of the plummeting pound.

“Investors are scrambling to get out of banking and house building stocks,” David Madden, analysts at CMC Markets said.

“The political uncertainty is so great, dealers are cutting their exposure to the British economy, and stock like Lloyds, RBS, Persimmom and Barratt Development are bearing the brunt of the decline.”

Head of european equity strategy at Barclays, Emmanuel Cau, said UK domestic stocks would be damaged the most by a no-deal Brexit.

He said: “The pound and UK domestic equity exposure have rolled over in tandem over the last few months and today we’ve seen market confidence shaken by the possibility of a no deal Brexit.

“In the case of a no deal, based on the market reaction seen in the immediate aftermath of the EU referendum, we expect UK domestic plays to be hurt the most, while exporters should fare better, relatively.”