Brexit shocks investors, Asian stocks prepare for steepest slump in 10 months
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Brexit shocks investors, Asian stocks prepare for steepest slump in 10 months

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.

The pound fell in value against all the Asian currencies early Friday, dropping from 5.8 to 5.6 Malaysian ringgit in less than an hour.

Meanwhile, the yen strengthened as investors sought safety in the safe haven currency. The dollar slipped to 104.73 yen from 104.80 after earlier falling as low as 103 yen.

Stocks across the region were also volatile on Friday with stocks in Tokyo and China, and U.S. futures, plunging as the result on whether Britain should stay in the European Union became apparent.

After a tight start, momentum swung towards the ‘Leave’ camp as the morning wore on, which is set to win with about 52 percent when all votes are counted.

At the time of writing, the BBC have called a Leave victory, as well as ITV.

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