Pound, Asia markets collapse as Britain quits EU

LONDON: British markets plunged on Friday, with sterling hitting a 31-year low in its biggest fall on record and UK stock futures pointing to a steep fall at the market open after Britons voted to leave the European Union.

Bonds also sold off sharply, pushing UK government borrowing costs sharply higher, as traders and investors grappled with the market implications of 'Brexit'.

The pound had hit a 2016 high above $1.50 after an earlier opinion poll showed an outcome in favour of 'Remain', but fell nearly 17 cents from that peak as area counts came in and TV stations said the Brexit camp had won the landmark referendum.

The British currency's fall of almost 10 per cent was also historic, marking a decline greater than anything seen since free-floating system of exchange rates was introduced in the early 1970s.

It was even bigger than on 'Black Wednesday' in 1992, when billionaire financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism.

London bankers working through the night said they hadn't seen anything like the volatility sweeping across UK assets.

“It's back to the future, we're back to where we were in 1985,” said Nick Parsons, co-head of global currency strategy at NAB.

“We've had a 10 per cent decline in six hours. That's simply extraordinary, and a vote to leave provides an existential crisis for Europe,” he said.

Sterling fell as low as $1.3305, its weakest level against the dollar since September 1985. It fell 6pc against the euro and 15pc against the yen .

The cost of insuring against swings in the sterling/dollar exchange rate jumped to 53.375pc, the highest since at least 1998, and stock futures pointed to a fall of 7pc at the London open.

Banks are likely to be in the spotlight after the Hong Kong listings of HSBC and Standard Chartered plunged as much as 10pc in Asian hours.

Bond trading platform Tradeweb opened earlier than usual on Friday, and initial data showed a jump in benchmark 10-year UK government bond yields to 1.57pc from around 1.38pc late Thursday.

“It's extraordinary. 'Shock' probably isn't too strong a word,” said John Wraith, Head of UK Rates Strategy, UBS Investment Bank.Pound, Asia markets collapse as Britain quits EU

amjad sabri's death in karachi, amjad sabri, death of amjad sabri, morning news, news, eid news, Dawn news, American news, Latest news of the day, Latest news, Pakistani news, sunday news, Today news, Kumble appointed as Indian cricket team's coach for a year, Sports news, news of sports, football news, Geo news, Pound, Asia markets collapse as Britain quits EU