Stocks tumble on Wall Street after Brexit vote
Speculations and fear brought about by the Brexit vote on Friday have caused several calamities in the stock market. Global stock markets lost $2 billion on Friday, while the sterling pound dropped to a historical 31-year low. Money also poured into government loans and safe-haven gold. Gold prices and the Japanese yen saw a rise. Gold rose nearly 4 percent.
The Dow Jones Industrial Average dropped 610.32 points, or 3.4%, to 17400.75, while the S&P 500 index fell 75.91 points, or 3.6%, to 2037.41. The Stoxx Europe 600 index fell 7%, and Japan’s Nikkei Stock Average declined 7.9%. The Stoxx decline hit its steepest drop since 2008.
In Europe, stocks tumbled as well. Frankfurt .GDAXI and Paris .FCHI fell 7 percent to 8 percent each. Italian .FTMIB and Spanish .IBEX markets fell above 12 percent, their sharpest one-day drops ever. European bank stocks .SX7P. Italy's Unicredit (CRDI.MI) fell 24 percent while Spain's Banco Santander (SAN.MC) fell 20 percent.
Britain’s big banks also saw declines of $100 billion, with Lloyds (LLOY.L), Barclays (BARC.L) and RBS (RBS.L) dropping as low as 30 percent.
Dow Jones industrial had the worst drop in 10 months, with a drop of 655 points.
Politically, the voting went 51.9 vs 48.1 which create a rather unsettling situation in the UK with an uncertain future ahead. This level of uncertainty will inevitably shake the markets globally. The sterling fell to its lowest since 1985; it slid 3 percent to an exchange of $1.1050 EUR.
Oil prices also faced a meltdown as they slumped 5 percent due to the fears of a broader economic slowdown.
Fears of economic slow movement caused the tumbling and shockwaves in stocks. The Bank of England, European Central Bank and the People's Bank of China have all said they are ready to provide liquidity if needed in order to keep global market security.