Pound pummelled, stocks slammed by Brexit vote

Britain’s surprise vote to leave the European Union sent shockwaves across global markets yesterday as it ushered in new element of uncertainty in a world already plagued by weak growth.
Sterling crashed 10% to a 31-year low at one point and the euro also plummeted against the dollar, as traders had banked in the run-up to the vote on Britain opting to remain in the EU based on polls and bookmakers’ predictions.
London’s benchmark FTSE 100 index plummeted 7.5% at the open, but began to recover after British Prime Minister David Cameron said he would step down and pledges by central banks to provide sufficient liquidity to volatile markets.
The announcements stemmed losses on major European markets, with London’s main FTSE 100 index closing the day down just 3.2% at 6,138.69 points, and was in fact up over the week.
Frankfurt’s DAX 30 was down 6.8 % at 9,557.16 points, Paris’ CAC 40 was down 8.0 % at 4,106.73 points and the EuroStoxx 50 was down 8.5 % at 2,779.67 points at close.
But in the eurozone the losses were of a magnitude unseen since the dark days of the global economic crisis.
The Frankfurt stock exchange suffered a 6.2% blow, while Paris slumped 8.0%
But Milan slumped 12.5% and Madrid 12.4% on jitters ahead of Spanish elections tomorrow.
US stocks were down around three% in late morning trading.
After rallying above $1.50 at the time voting ended, the pound steadily crumbled to its lowest level since 1985, at $1.3229 at one point, before unwinding some losses.
The dollar slumped briefly to ¥99.02, the first time it has gone below ¥100 since November 2013, before edging back up above ¥102.
The Japanese unit is considered a safe bet in times of uncertainty and turmoil.
Highlighting the uncertainty, US investment bank JPMorgan Chase warned that it could relocate UK jobs abroad.
Banks took some of the biggest hits.
In Britain, Lloyds tumbled 21%, RBS 18.8% and Barclays 17.7%.
In France, shares in Societe Generale plunged 20% and BNP Paribas by 17.4%, while in Germany, Deutsche Bank slumped 14.1% and Commerzbank by 13.0%.
Spain’s Santander sank 20% and Italy’s Unicredit fell nearly 24%.
Investors also sought the relative safety of government bonds.
The price on the German benchmark 10-year sovereign bond rose sharply, pushing its yield into negative territory for only the second time in its history.
UK government bonds also rose, taking their 10-year yield to a historic low.
Gold, a traditional refuge asset, struck a two-year high.
But elsewhere, billions of dollars were wiped off investment portfolios.