This week, equity markets have encountered a high level of volatility. In the short term, this may continue and we may see something like Wednesday’s fall below 7,000 (and subsequent recovery) again. For long-term investors, I think such a mini stock market crash — and any potential bigger crash — could present an opportunity to snap up some FTSE 100 shares at discounted prices.
With that in mind, here are five blue-chip stocks I would buy for my portfolio.
Stock market crash bargains
The first company on my list is the real estate investment trust British Land. Figures show that workers are returning to offices, and consumers have returned to bricks-and-mortar stores around the UK. Rent collection by commercial property landlords is also returning to pre-pandemic levels.
Nevertheless, shares in British Land continue to trade below the level at which they started 2020. I think this could be an opportunity for me to buy this portfolio of high-quality commercial property assets at a discount. Challenges the company may face include further coronavirus restrictions, which may lead to another dip in rent collections.
I would also use the stock market correction to snap up shares in FTSE 100 banks Standard Chartered and NatWest.
The former offers a way for investors to build exposure to the global economy and economic recovery. It has a network of offices around the world, with a focus on emerging markets. It has also been building out its wealth management division, which has more substantial margins than the traditional banking business in recent years.
Meanwhile, NatWest is a UK-focused lender, which should benefit from a UK economic recovery. Over the past 24 months, the group has suffered a high level of turbulence, but it exited the coronavirus crisis with a strong balance sheet, and profits are now returning to growth.
Both of these lenders should also report additional growth if interest rates start to rise. That said, if interest rates are held at record low levels or even fall into negative territory, both lenders could suffer.
FTSE 100 recovery stocks
I think a stock market mini crash could also provide an excellent opportunity to buy FTSE 100 recovery stock Intercontinental Hotels. The travel and tourism industry was brought to its knees by the pandemic. It is now starting to recover.
With its stable of well-known and international brands, I think Intercontinental is one of the best ways to invest in this recovery. That is why I would buy the stock for my portfolio.
However, this is not a risk-free investment. It may take years for the travel and tourism industry to recover to 2019 levels of activity. Therefore, this investment may not be suitable for all.
Finally, I would buy the buildings materials supplier CRH. As the world rebuilds from the pandemic, demand for building materials is exploding. The company is already benefiting from this trend, and its share price has responded positively.
However, in the recent stock market dip, shares in the FTSE 100 company actually crashed, falling by more than 10%. As such, I think this is an opportunity to buy a growth business at a discount valuation. Challenges it may face as we advance include higher wage costs and price inflation of materials.
