Newspaper article The Evening Standard (London, England)

Sell! Sell! Sell! Worldwide Market Meltdown after Brexit; FTSE IN WORST CRASH SINCE LEHMAN BROTHERS DISASTER BANK OF ENGLAND'S CARNEY: WE'RE BRACED TO INTERVENE

Newspaper article The Evening Standard (London, England)

Sell! Sell! Sell! Worldwide Market Meltdown after Brexit; FTSE IN WORST CRASH SINCE LEHMAN BROTHERS DISASTER BANK OF ENGLAND'S CARNEY: WE'RE BRACED TO INTERVENE

Article excerpt

Byline: Russell Lynch

BRITAIN dropped a Brexit bomb on the world's financial markets today after its seismic vote to leave the European Union.

In the worst of the turmoil, a massive 550 points, around PS142 billion, was wiped off the value of London's FTSE 100 index as panicking traders dumped shares.

The blue-chip benchmark later settled 4%, or 280.39 points, lower at 6057.71 as Bank of England Governor Mark Carney moved to quell the terror, following the resignation of David Cameron as Prime Minister and the biggest drop in the value of the pound since 1985.

Sterling tanked 10% to $1.3228 at one stage but Carney held out the prospect of an interest rate cut or a return to money-printing, saying: "We will not hesitate to take any additional measures required to meet our responsibilities as the UK moves forward." But the decision sent tremors through world markets, triggering a huge 8% sell-off in Japan's Nikkei and even heavier damage in European markets as traders began to speculate over a full-scale break-up of the EU.

In France, where the far-right National Front called for its own referendum today, the CAC 40 index fell more than 9% while Germany's Dax tumbled 8%.

In Spain and Italy, leading shares sank a dramatic 11% and 6% . The worst shares casualties in London were banks and housebuilders, with Barclays, Lloyds and Royal Bank of Scotland tumbling close to 20% as traders bet on a protracted period of disruptive uncertainty for the UK economy.

Investors parked their cash in gold and safe-haven UK gilts, pushing the Government's cost of borrowing to an all-time low of 1.02% at one stage.

CMC Markets' chief market analyst Michael Hewson said: "This market was positioned completely wrongly. They made a big bet that we would remain and they got it massively wrong."

The demand for German bunds was such that investors are paying to lend to the German government rather than put their money elsewhere. …

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