Provident Financial Plc’s 66 percent collapse yesterday -- the biggest one-day plunge in Europe’s Stoxx 600 this year -- followed the latest in a string of profit warnings from U.K. companies.

?As a result, four of the five biggest one-day price retreats this year in the benchmark have come from U.K. stocks. Provident’s tumble was preceded by declines of more than 20 percent by Petrofac Ltd., Pearson Plc and BT Group Plc, according to data compiled by Bloomberg.

In fact, U.K. names make up 11 of the 20 steepest single-day losses in 2017, the data show.

The downward earnings revisions add to a landscape littered with the fallout from Brexit, rising consumer debt loads and a beleaguered pound. For those evaluating performance in euro terms, the FTSE 100 is the worst major index in Europe this year.

Eoin Treacy's view

The low levels on volatility indices belie what has been a significant uptick in single stock volatility. While that might be most evident in the UK, where there is continued uncertainty about the outcome of the Brexit negotiations, it is a phenomenon that is becoming increasingly evident both on Wall Street on continental Europe. 

There are two primary results from this kind of market activity. Investors already eschew individual stocks in favour of ETFs. However, the kinds of headlines where widely held constituents of a major index collapse without a measurable impact on the wider market only confirm the decision to pursue a passive strategy. At the same time when the mega-cap constituents of an Index make headlines by hitting new highs the strategy of buying the ETF instead of the individual share supports the Index price. 

The second point is that this trend of adopting passive strategies ignores what can be declining breadth or polarisation in performance which is certainly more evident right now with cyclicals like miners, banks and technology outperforming by a wide margin. 

Meanwhile both the UK and EU’s major indices are engaged in a process of mean reversion sustained moves below their respective 200-day MA would be required to question uptrend consistency.