Update | Wall St, global stocks take savage beating after Britain votes shockingly to abandon EU
Over US$2 trillion wiped out in Friday’s massive sell off as uncertainty plagues next week’s trading
Global stock markets lost about $2 trillion in value on Friday after Britain voted to leave the European Union, while sterling suffered a record one-day plunge to a 31-year low and money poured into safe-haven gold and government bonds.
The blow to investor confidence and the uncertainty the vote sparked could keep the US Federal Reserve from raising interest rates as planned this year, and even spark a new round of emergency policy easing from major central banks.
The move blindsided investors, who had expected Britain to vote to stay in the EU, and sparked sharp repricing across asset classes. Mainland European equity markets took the brunt of selling as investors feared the vote could destabilise the 28-member bloc by prompting more referendums.
Stocks on Wall Street traded down more than 3 per cent, with the Dow Jones industrial average dropping as much as 655 points, its worst daily drop in 10 months.
“I think markets were really caught off guard today, that’s why you are seeing a huge risk-off trade”
The Dow Jones industrial average fell 611.21 points, or 3.39 per cent, to end at 17,399.86, the S&P 500 lost 76.02 points, or 3.6 per cent, to 2,037.3 and the Nasdaq Composite dropped 202.06 points, or 4.12 per cent, to 4,707.98.