Global markets buckled, with stocks plunging from Tokyo to London and Chicago, after early results from Britain’s referendum on membership of the European Union put the “Leave” campaign ahead. The pound fell the most on record, while haven assets jumped.
Sterling tumbled as much as 8.3 percent, the euro retreated from a six-week high and the yen surged. South Africa’s rand led losses among the currencies of commodity-exporting nations, sliding more than 5 percent as oil sank toward $48 a barrel and industrial metals slumped. Gold soared with U.S. Treasuries as investors piled into haven assets. Futures on the FTSE 100 Index plunged with S&P 500 Index contracts as benchmark stock gauges slid across Asia.
“There are wild swings all over the place,” said Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong. “Unless a speculator has special insight into the matter, it will be better to wait on the sidelines rather than betting blindly.”
The debate over the U.K.’s EU membership has dominated investor sentiment in June, with appetite for riskier assets having built up over the past week as bookmakers’ odds suggested the chance of a so-called Brexit was less than one in four. The probability jumped as high as 87 percent amid the initial wave of results, Oddschecker data show. Central banks and governments have warned a British withdrawal from the EU would hurt global economic growth and trigger volatility in financial markets.
Currencies
The pound was 7.7 percent weaker at $1.3739 as of 11:45 a.m. in Tokyo, after earlier climbing above $1.50 for the first time since December. The euro slumped 2.8 percent, while currencies in Norway, Sweden and Poland posted steeper losses. South Africa’s rand tumbled 6.6 percent, leading declines in emerging markets.
Japan’s currency surged 5.8 percent versus the dollar. Against the pound, it jumped by a record 12 percent.
Stocks
Futures on the FTSE 100 sank 7.7 percent, while contracts on the S&P 500 were down 3.3 percent.
The MSCI Asia Pacific Index declined 1.4 percent, with Japan’s Topix falling 3.2 percent. Hong Kong’s Hang Seng Index lost 3.1 percent as benchmarks retreated across the region.
“We’ll keep swinging from joy to sorrow all day,” said Takuya Takahashi, a Tokyo-based senior strategist at Daiwa Securities Group Inc. “We don’t have calm views, and investors are moving on short-term information.” Bloomberg
