Brexit shocks investors, Asian stocks prepare for steepest slump in 10 months
A man walks past an electronic board showing world stock exchange rates including Britain's, top left, at a securities firm in Tokyo, Friday. Pic: AP.
UPDATE
BLOOMBERG has reported that the Asian stock market is steeling itself for one of its biggest shake-ups in 10 months following Britain’s shock vote to quit the European Union in yesterday’s Brexit referendum.
Japan’s Topix index took a nosedive to the lowest its been since 2011, plunging 7.3 percent to 1,204.48 by the end of the day.
As of just after 4pm in Hong Kong, the MSCI Asia Pacific Index had fallen 4.1 percent to 124.69, while Australia’s S&P Index futures dropped 3.3 percent.
The Hang Seng Index, also in Hong Kong, dropped 2.9 percent, while South Korea’s Kospi fell the most since May 2012.
As the British pound wavered uncertainly in the aftermath of Brexit, central banks in Asia mobilized to avoid breakdowns in financial-market liquidity, with Japan’s Finance Minister Taro Aso emphasizing that the central banks of six major developed nations have “currency-swap lines” to provide liquidity.
The “Leave” vote has culminated in Prime Minister David Cameron’s announcement that he will resign by October. In his address in front of 10 Downing Street, he said: “I will do everything I can as Prime Minister to steady the ship over the coming weeks and months but I do not think it would be right for me to try to be the captain that steers our country to its next destination.”
Britain voted “Leave” by 52 perecent, with 1,269,501 more votes than “Remain”. The Bank of England and the European Central Bank have pledged to shield the markets in the referendum’s wake, with the ECB promising to provide extra liquidity to protect the financial world.
ORIGINAL ARTICLE
THE British pound plummeted Friday as Britain voted to leave the European Union in the Brexit referendum.
The British currency fell to a 31-year low of $1.35 hours after hitting a 2016 peak of $1.50. Some news outlets reported that the currency was on track for its biggest ever daily decline.
Reuters reported that trading was halted for 10 minutes for Japan’s Nikkei futures as equity markets plunged ahead of official confirmation of the Brexit.
