Interactive Investor

Stockmarkets and pound plunge on 'Black Friday' as Britain votes for Brexit

24th June 2016 09:24

Kyle Caldwell from interactive investor

Both the FTSE 100 and the pound have fallen dramatically in early trading on the back of Britain voting to leave the European Union. Financial markets are in freefall in early in trading, following the United Kingdom's vote to leave the European Union.

Panicked investors dumped shares in their droves, with the FTSE 100 down 6.6%, or 420 points, to trade just above 5,900 at 8.30am.

Bank and housebuilder shares were the biggest losers, in what has already being described as a "Black Friday" for stockmarkets.

Barclays and RBS are down about 30%, while Bovis Homes and Bellway had fallen 56% and 36% respectively.

The pound plummeted overnight as it became clearer that the 'leave' campaign was likely to emerge victorious.

At one point, it hit $1.3305, a fall of more than 10%. This represents a low not seen since 1985. At 8.30am the pound was down 8.3%, to trade at $1.36350.

The Leave campaign won by 52% to 48%, with the majority of regions across England and Wales voting for a Brexit.

In the wake of the result David Cameron has announced he will step down as prime minister in October.

European markets have also plunged, both the French Cac and German Dax are down 9.7% and 8.1% respectively.

Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said market carnage has been pronounced due to the fact that the market had priced in a remain victory.

"Global markets are in turmoil in the aftermath of the surprise UK Leave vote. Having spent all of the last week gearing up and going up in anticipation of a Remain vote, the carnage is even more pronounced in the currency, equity and bond markets as analysts and investors struggle to work out what fair value is.

"This leap into the unknown leaves a huge number of economic and political questions unanswered for both the UK and the wider European Union and this is adding to the uncertainty for investors. Will the immediate market moves be overdone, or is this the start of a protracted fall for both sterling and equity markets?"

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser

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