Brexit Upends Global Markets as Stocks, Pound Plunge; Yen Soars
by James Regan, Stephen Kirkland
June 23, 2016 — 5:57 PM EDT
Updated on June 24, 2016 — 5:31 AM EDT
Global markets buckled as Britain’s vote to leave the European Union drove the pound to the lowest in more than 30 years and European banks to their steepest losses on record.
Why Britain Voted to Leave the EU
“It’s scary, and I’ve never seen anything like it,” said James Butterfill, 41, head of research and investments at ETF Securities in London. “A lot of people were caught out, and many investors will lose a lot of money.”
Sterling slid by the most on record and European stocks headed for the biggest drop since 2008 as trading soared. The yen strengthened past 100 per dollar for the first time since 2013, gold rose the most in more than seven years and benchmark Treasury yields had their biggest drop since 2009.
The victory for the "Leave" campaign prompted Prime Minister David Cameron to resign. The outcome stunned many investors who’d put wagers on riskier assets over the past week as bookmakers’ odds suggested the chance of a so-called Brexit was less than one in four.
The final tally, announced just after 7 a.m. London time, showed voters had backed “Leave” by 52 percent to 48 percent. JPMorgan Chase & Co. and HSBC Holdings Plc said the result may prompt them to move thousands of jobs out of London. S&P Global Ratings said the U.K. will lose its AAA credit rating.
Some equity benchmarks and currencies pared losses after Governor Mark Carney said the Bank of England was ready to pump billions of pounds into the financial system to support markets and wouldn’t hesitate to take additional measures if needed.
To track Bloomberg’s live blog of the U.K. referendum, click here.
These are among the most notable moves in global financial markets:
British pound falls as much as 11 percent to $1.3229, weakest since 1985
Yen jumps 3.2 percent to 102.85 per dollar, after reaching 99.02
FTSE 100 Index slides as much as 8.7 percent, most since 2008
S&P 500 Index futures slump as much as 5.1 percent, triggering a trading curb
Yield on 10-year Treasuries drops 29 basis points to 1.46 percent
Gold surges as much as 8.1 percent to $1,358.54 an ounce
New York crude oil retreats 3.8 percent to $48.20 a barrel, poised for biggest loss since April
Poland’s zloty, South Africa’s rand drop more than 4 percent per dollar, lead emerging-market currencies lower
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