(Bloomberg) -- The pound may have recouped most of its drop since Kwasi Kwarteng’s mini budget last week spurred a market meltdown, but stocks dependent on Britain’s economic health are still nursing big losses. 

Swathes of the UK stock market remain down by double-digit percentages since the Chancellor of the Exchequer’s radical tax cuts, which raised concerns about ballooning debt and even higher inflation. Lenders Barclays Plc and Lloyds Banking Group Plc and retailers Marks & Spencer Group Plc and Tesco Plc are among the big decliners. 

Asset managers have seen their valuations cut, while homebuilders and real estate investors shares have been especially hard hit, with soaring yields prompting a mortgage market crisis and predictions of a house-price slump.

Beyond the main indexes, concern about the broader health of the UK economy is even more apparent. The FTSE Local Index of firms that generate at least 70% of sales domestically, is down 12% since the budget through yesterday’s close. Such companies face a plethora of challenges, from the weak pound to higher energy costs and squeezed consumer demand.

Meanwhile, the FTSE 100 Index, whose constituents get more than three quarters of their sales abroad, is down just 3% since the tax cuts were announced.

Liberum Capital strategist Susana Cruz says the fiscal news means the domestic UK market may not bottom out before the year-end, as she had previously expected. 

“The recent developments suggest that the bottom is farther than that,” Cruz said by email. “We need to see some signs of stability and coordination on the fiscal and monetary front before getting our hopes up.”

For now, the big exporters are a better bet, according to Adrian Gosden, investment director responsible for UK equities at GAM Investments.

“Before investors get brave by investing in the FTSE 250 and below, clearly the FTSE 100 offers international companies with meaningful US dollar exposure,” Gosden said by email. 

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