MORGAN STANLEY: FTSE TO 5,000

Despite Chancellor George Osborne's reassuring words on Monday morning, uncertainty still stalks the market.

European stocks slipped and some names were hit particularly hard.

EasyJet, the budget airline, dropped more than 7% after issuing a profit warning, while banking and housebuilding stocks are continuing to take a pounding, with Barclays, Lloyds, and RBS all lower by around 5% on Monday.

The FTSE 100 itself stabilised a little from Friday's plunge, down just 0.45% to 6,100 on Monday morning, having dropped more than 15% at the open on Friday.

Here's how that looked on the chart:

But the worst may be yet to come. The value of UK stocks could fall about 18% in the post-Brexit world, according to analysts at Morgan Stanley, from 6,100 to 5,000.

Here's what the investment bank said in a research note for clients published on June 24:

"A great deal of uncertainty hovers around all of our estimates in this scenario. Generally speaking, we see the most downside in European FX and equities."

"We expect significant downsidefor European stocks - SX5E (Euro Stoxx 50) at 2400-2550 and FTSE 100 at 5000-5300. Financials and Consumer Discretionary will likely lead the market lower, while Staples and Healthcare should outperform."

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