Analytics, Banks, EU – Baltic States, Financial Services, Investments, Lithuania

"Last Friday's sentiment continues in the markets on Monday and it appears that this entire coming week will be unpleasant," Giedre Geciauskiene, head of financial markets at Danske Bank Lithuania, told BNS.

The shock wave on Monday reached the Baltic stock markets, which were closed for public holidays at the end of last week.

"The Baltic stock exchanges were closed on Friday and we see investors' reaction to the unexpected results of the British referendum on Monday. More liquid stocks, such as Siauliu Bankas and Klaipedos Nafta, are the hardest hit," Arvydas Jacikevicius, the chief broker at SEB Bankas, told BNS.

According to the broker, speculators may take advantage of the stock market turmoil.

"Local news fades into insignificance with everybody watching the global reaction. We see some stabilization in European markets at the moment and if this trend stays in Europe, this could be good news to those in our market who bought shares right away, because the fears may subside and share prices may rebound," he said.

The OMX Vilnius index dropped by 1.97% on Monday and the OMX Baltic Benchmark moved down by 1.71%.

The analysts say that the markets are unlikely to return to the pre-referendum level in the near future and may fall further in the absence of good news.

"We will continue to see a further fall for another week or two weeks, because there will be no good news and nothing will happen to reassure financial market participants that the situation is being handled," Geciauskiene said.

"We anticipate a further decline in the stock market and the weakening of the pound and the euro against the (US) dollar," the Danske Bank analyst said.