Brexit fallout: Europe stock markets set to fall at least 7% on opening

A financial trader monitors data inside Frankfurt Stock Exchange on June 24, 2016.
A financial trader monitors data inside Frankfurt Stock Exchange on June 24, 2016.PHOTO: BLOOMBERG

Paris (AFP) - Europe's main stock markets are headed for a steep fall of at least 7 per cent at the opening after Britain's decision to leave the European Union, brokers said Friday (June 24).

London stocks, in the frontline of the fall-out from the vote to leave, are likely to plunge around 7 per cent when trading gets underway at 3pm Singapore time, analysts at both CMC Markets and ETX Capital predicted.

Inside the eurozone, the Paris stock market is expected to see a similar drop, while Frankfurt shares are likely to fare only slightly better, with expectations for a 6 per cent fall of the German DAX index.

"European markets are now expected to open considerably lower, with FTSE futures pointing 7 per cent lower and this could extend further," said Mr Craig Erlam, senior market analyst at Oanda.

 

"Financial markets throughout the night have been chaotic to say the least and this may continue as the day progresses," he said.

In Asian markets, the pound collapsed to a 31-year low against the US dollar, while the yen surged against the US currency as investors fled to safety.

In the weeks leading up to Thursday's historic vote, there had been widespread warnings that a vote to leave would cause a rout across global markets that would wipe trillions off valuations, just months after a painful China-fuelled sell-off.

Investors were clearly wrong-footed by the vote outcome. Stock markets and the pound had climbed steadily in the week ahead of Thursday's referendum on expectations that Britons would reject Brexit.