EUROPE MARKETS: European Stocks Book Worst Session Since 2008 On Brexit Vote
June 24 2016 - 11:21AM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Bank stocks, pound slammed as Brexit closer to a reality
European stocks posted their worst daily drop in nearly eight
years Friday, after investors dumped risk assets following the
U.K.'s historic referendum that left the country on course to leave
the European Union.
The Stoxx Europe 600 tumbled 7% to 321.98, marking its worst
session since October 2008 in fallout of Lehman Brothers
bankruptcy, according to FactSet data. The stock gauge had been on
pace for its largest daily drop since October 1987, but pared
losses.
The pan-European benchmark has closed with a 1.2% weekly
decline, representing its fourth straight weekly drop.
Shares of gold miner Randgold Resources Ltd. (RRS.LN) shot up
14.2% as investors sought safety in gold . Numerous shares on the
Stoxx 600 were halted at the open.
In London, the FTSE 100 slid 3.2% to 6,138.69, bouncing back
from steeper early losses.
The selloff kicked off after results from the Brexit referendum
showed 51.9% of voters
(http://www.marketwatch.com/story/brexit-is-reality-uk-media-says-2016-06-24)
wanted the U.K. to ditch the EU, compared with 48.1% who preferred
to stay. The decision for a Brexit will see the country leave a
union that it's been a part of since 1973.
"With Britain shockingly (given the care-free trading during the
rest of the week) opting to leave the EU, the global markets have
committed hari-kari, diving head first into a variety of lows,"
said Connor Campbell, financial analyst at SpreadEx, in a note.
"With Brexit out of the way, the next thing is who's next,"
politically to make waves in the financial markets," said Brenda
Kelly, an independent market analyst based in London, of the
referendum result.
"You've got the National Front [in France] starting to come to
the fore," she added. "You saw it in the Italian elections recently
with the Five Star (Movement) very narrowly missing out on getting
into power. So this could really start to turn things around,
particularly if it's seen that the EU is in any sense punishing
Britain, that could ramp up euroskepticism as well."
Read more:Will the euro survive Brexit's aftermath?
(http://www.marketwatch.com/story/how-brexit-triggers-new-worries-about-the-survival-of-the-euro-2016-06-24)
And see:"Panic" and "bloodbath" -- analysts react to Brexit
(http://www.marketwatch.com/story/panic-and-bloodbath-analysts-react-to-uks-decision-to-brexit-2016-06-24)
European bank stocks were mauled
(http://www.marketwatch.com/story/european-banks-take-a-hammering-after-brexit-vote-2016-06-24),
sending the Stoxx 600 Banks Index sliding 14.5%. London-based
Barclays PLC (BCS) (BCS) tumbled 18%, HSBC PLC (HSBA.LN) (HSBA.LN)
ended 1.4% lower. British banks with overseas operations rely on
passporting rules
(http://www.marketwatch.com/story/why-a-brexit-could-kill-london-as-a-top-financial-hub-2016-06-01)
to easily access EU markets.
Elsewhere in the group, Spain's Banco Santander SA (SAN) closed
20% lower, Germany's Deutsche Bank AG (DBK.XE) dropped 14.1%, and
Commerzbank AG (CBK.XE) lost 13%.
Britain's Prime Minister David Cameron on Friday said he's
resigning
(http://www.marketwatch.com/story/uk-prime-minister-david-cameron-resigns-after-brexit-vote-2016-06-24)
in the wake of the vote outcome.
Financial analysts had warned a Brexit would pummel European
markets, as the event will spark uncertainty about growth prospects
for the region and the network of trade, immigration, labor and
other agreements between Britain and the other 27 members of EU.
Many traders had been expecting a "remain" victory, and global
stocks had been rallying ahead of the referendum.
Check out:How Brexit blindsided investors, in 5 charts
(http://www.marketwatch.com/story/how-brexit-horribly-blindsided-investors-in-5-charts-2016-06-24)
Indexes: Germany's DAX 30 was knocked down 6.8% to 9,557.16, and
France's CAC 40 tumbled 8% to 4,106.73.
Spain's IBEX 35 fell 12.4% to 7,787.70, and Italy's FTSE MIB
lost 12.5% to 15,723.81.
The euro was down 1.9% to $1.1101, and the pound sank 5% to
$1.3643. But sterling was off its session lows
(http://www.marketwatch.com/story/pound-bounces-sharply-as-brexit-results-come-in-2016-06-23),
which had pushed the currency down more than 10% to below
$1.33.
(END) Dow Jones Newswires
June 24, 2016 12:06 ET (16:06 GMT)
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