European, Asian stocks crash after UK vote to leave EU

SEOUL, South Korea (AP) — European and Asian stock markets crashed Friday as Britain’s unprecedented vote to leave the European Union rocked world financial markets and also sent oil prices crashing and the pound to its lowest level in three decades.

Investors dumped European shares as soon as the markets opened, following earlier drops in Asia. Britain’s FTSE 100 plunged about 8 percent while German index tanked 10 percent. France’s index tumbled about 7 percent.

The result of the vote, which trickled in when Asian markets were trading, hit Tokyo stocks hard. The Nikkei 225 plummeted about 8 percent, its biggest fall since 2008. Other Asian markets were poised to finish the day with their biggest losses in several years. Governments in Asia vowed to take measures to stabilize the financial markets as the uncharted, unexpected path of a European Union without Britain sparked panic.

Oil prices crashed and U.S. futures also took a big hit. The pound hit its lowest level in three decades. The yen, however, surged as much as 4 percent to the U.S. dollar as investors seeking safety snapped up the Japanese currency.

“You can see people are running for cover,” said Ken Courtis, chairman of Starfort Investment Holdings in Tokyo. Investors were betting on a victory for the remain side, but “what you’re seeing now in markets is an adjustment in the other direction, as everyone tries to get through a tiny door at the same time,” he said.

The British currency managed to recover and narrow its fall by mid-afternoon in Asia, after diving as much as 8 percent to the lowest level in 31 years. The pound traded 6 percent lower against the dollar at $1.3694. It was down about 4 percent against the euro, at 1.2363 euros.

Britain’s decision to leave the EU launches what will be years of negotiations over trade, business and political links with the EU, which will shrink to a 27-nation bloc.

“The currency markets are particularly making nervous fluctuations and we will watch their activity very closely so that the ongoing movement will not continue, and I hope to see firm intervention whenever necessary,” Taro Aso, Japan’s finance minister, told reporters.

Other policymakers in Asia also expressed concerns and vowed to take measures to restore stability in the markets. South Korea’s finance ministry said it will take “every available measure” to stabilize currency and financial markets.

Japan’s Nikkei 225 finished the wild day at 14,952.02 down 7.9 percent while South Korea’s Kospi sank 3.1 percent to 1,925.24, its biggest fall in four years. Hong Kong’s Hang Seng index tumbled 4.4 percent to 19,942.90 and Australia’s S&P/ASX 200 fell 3.2 percent to 5,113.20. Stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.

U.S. markets were set to start with big losses as well. Dow futures fell about 3 percent and S&P futures sank about 4 percent.

“Financial markets throughout the night have been chaotic to say the least,” said Craig Erlam, senior market analyst at Oanda in London. “All eyes will now be on central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan.”

In other currencies, the dollar fell to 102.52 yen from 104.80 yen while the euro weakened to $1.104 from $1.132.

Benchmark U.S. crude plunged about 5 percent to $47.65 per barrel in New York. Brent Crude, the benchmark for international oil price, also fell about 5 percent to $48.54 per barrel in London.

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