Shares and pound plunge on Leave vote

 

The London stock market has plunged in the wake of the UK's referendum vote to leave the EU.

In the opening minutes of trade, the FTSE 100 index fell more than 8% before regaining some ground by mid-morning.

Banks were hard hit, with Barclays and RBS falling about 30%, although they later pared losses to about 17%.

Earlier, the pound fell dramatically as the referendum outcome emerged. At one stage, it hit $1.3236, a fall of more than 10% and a low not seen since 1985.
The Bank of England said it was "monitoring developments closely" and would take "all necessary steps" to support monetary stability.

 

"This is simply unprecedented, the pound has fallen off a cliff and the FTSE is now following suit," said Dennis de Jong, managing director of UFX.com.
"Britain's EU referendum has been a cloud hanging over the global economy for the past few months and that cloud has got very dark this morning.
"The markets despise uncertainty, yet that is exactly what they're faced with this morning. The shockwaves are likely to reverberate for some time and the warning lights are flashing brighter now than ever."
The FTSE's slump was its biggest one-day fall since the collapse of Lehman Brothers in October 2008.

 

As well as the banks, the housebuilding sector was also badly hit, with shares in Bovis Homes down more than 50%.
UK government bond yields hit a new record low, with 10-year yields down more than 30 basis points to 1.018%, according to Reuters data.
Two-year yields fell more than 20 basis points to their lowest levels since mid-2013, at 0.233%.
The impact of the vote was also felt in other European countries. The Paris and Frankfurt indexes were both down about 8% at one point, while the Swiss central bank intervened on the money markets to steady the Swiss franc after it appreciated in value.
Oil prices have also fallen sharply in the wake of the referendum outcome, with Brent crude down 5.2%.
The price of Brent crude fell by $2.68 to $48.24 a barrel, its biggest fall since February. At the same time, US crude was down 5.4%, or $2.69, to $47.52 a barrel.
The price of gold jumped nearly 7% to $1,348.27 an ounce as investors sought a haven in turbulent markets.