Markets Around the World in Crisis Mode as Britain Votes to Leave EU
TEHRAN (Tasnim) – Investors around the world went into crisis mode as British voters chose to leave the European Union in a stunning decision with far-reaching implications.
The pound plunged close to $1.33, its lowest level in more than 30 years, as the results of the referendum became clear. It's now trading down 9% at below $1.38. The euro also fell heavily.
In the final count, 51.9% of votes were for leaving. Many investors had been betting on Brits choosing to stay.
"Everybody's obviously a little bit stunned," said Andrew Sullivan, managing director of sales trading at Haitong International Securities in Hong Kong. "Equally, I think there have been people who are looking to take advantage of the situation as and where they can."
Stocks got hammered amid the panicked mood. Shares in London got off to a brutal start, collapsing more than 8% soon after the open. Bank stocks took a particularly heavy hit as several UK lenders nosedived more than 20%.
After wild swings in Asian trading, Japan's Nikkei closed down 7.9%. The Hang Seng in Hong Kong dropped 2.9%. US stock futures are also sharply lower, with the Dow projected to tumble more than 450 points at the open.
Investors turned to safe haven assets like the Japanese yen, which soared against the dollar. Gold jumped around 4%.
"The markets have been betting on remain in the past few days, and when the first results came in, that has reversed," said Vicky Pryce, an economist and former UK government official.
Pryce was watching the results come in at the London School of Economics, where the mood was very nervous.
Most of those attending -- and most expert economists -- wanted the UK to remain in the EU. They are worried "Brexit" could hurt the UK economy.
"I've just seen my salary vaporize," Luis Garicano, LSE professor of economics and strategy, said as the pound tumbled after the first results were announced, CNN reported.
On Thursday, investors had been growing increasingly confident that the country would vote to remain a member of the 28-nation bloc. The pound made gains, and US and European stocks rose.
Concerns over Britain potentially choosing to leave the EU have caused turmoil in international markets in recent weeks. The FTSE 100 seesawed violently and the pound was more volatile than even during the 2008-2009 financial crisis.