‘Earthquake’ in the UK sends the Dow plunging by more than 600 points, wrecking the world markets.

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Global Markets in Turmoil Following Brexit Vote

Global financial markets were thrown into turmoil as British voters opted to leave the European Union in a shocking decision with widespread consequences. <br

Major U.S. indices plummeted, with the Dow Jones closing down over 3.4%, the S&P 500 losing 3.6%, and the Nasdaq dropping over 4%, pushing it into correction territory.
Market Uncertainty Over the Weekend: The results came in on a Friday, leaving investors facing an uncertain weekend. There’s concern that other EU countries may follow with their own referendums. Moreover, the surge of the dollar against the euro and pound could potentially lead to China devaluing its currency.
Impact on EU Institutions: More exits from the EU could challenge institutions like the European Central Bank, which played a crucial role in the continent’s recovery from the global financial crisis.
Pound and Euro Declines: The British pound plummeted to its lowest level in over 30 years, falling approximately 6% to $1.36. The euro also saw a significant decline.
Global Liquidity Concerns: Investors are worried about liquidity drying up in global financial markets, potentially resembling the situation during the Lehman crisis.
Political Fallout: The unexpected Brexit outcome caused immediate political shockwaves, leading to Prime Minister David Cameron’s resignation. Jean-Claude Trichet, former ECB president, described it as an “earthquake.”
Bank Stocks Suffer: Bank stocks faced heavy losses, with many European lenders dropping over 15%. Central banks in the U.S., U.K., and eurozone expressed readiness to provide support as needed.
Asian Markets in Freefall: Asian markets experienced dramatic losses, with Japan’s Nikkei plummeting 7.9% and the Hang Seng in Hong Kong dropping 2.9%. U.S. stock futures pointed to a significant decline.
Safe Havens: Investors sought refuge in safe-haven assets like the Japanese yen, which surged against the dollar. Gold also experienced a more than 4% increase.
Markets Reversal: This outcome represented a stark reversal for global stock markets, which had grown increasingly confident in a “remain” vote. The pound gained, and U.S. and European stocks had risen in anticipation of this outcome.
Concerns Over Brexit: Fears about a potential Brexit had already caused turmoil in international markets, with the FTSE 100 and pound experiencing extreme volatility.
Record Voter Turnout: A record number of voters participated in the referendum, and campaigning had deeply divided the country on issues of immigration and the economy.

The decision to leave the EU represents a major turning point in global financial markets, leaving investors and policymakers grappling with uncertainty and volatility. Get back to SeylanBit News 🤓

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