The day after Brexit: Remembering a chaotic day in the markets one year ago – Business Insider
LONDON — One year ago today, having gone to bed with rain pouring
down outside, Brits awoke to glorious sunshine — and the news
that they’d voted to leave the European Union.
What followed on Friday, June 24, 2016, was a day of political
and financial chaos unprecedented in Europe since the heart of
the global financial crisis. Markets around the world crashed,
investors flooded into safe havens like gold, and panic spread.
Business Insider took a look back at one of the wildest days in
recent markets history. Check out a handful of the biggest
movements and scariest moments:
The pound crashes to a 31-year low
Sterling dived off a cliff, losing around 3% of its value, after
early morning results show the northern city of Sunderland voting
more heavily for Brexit than had been expected. Up until this
point, most had expected the Remain campaign to win but
Sunderland’s voting pattern was taken as a sign that the Leave
campaign could clinch it.
As more results rolled in, the pound continued to tank and lost
more than 10% of its value at its lowest point. By the end of the
day, the currency had recovered a little and was down 8% or so to
trade close to $1.36.
It would be the biggest single day fall for a major currency
since the Second World War.Investing.com
“All necessary steps”
At 7.00 a.m, as Brits are starting to wake up,
the Bank of England issues a statement saying it is willing to
take “all necessary steps” to fulfil its responsibilities and
safeguard the UK in an attempt to calm crazy volatility in the
“The Bank of England is monitoring developments closely. It has
undertaken extensive contingency planning and is working closely
with HM Treasury, other domestic authorities and overseas central
banks,” it said.
“The Bank of England will take all necessary steps to meet its
responsibilities for monetary and financial stability.”
Later in the morning,
Governor Mark Carney would give a speech reassuring investors
and saying that the Bank was “ready to provide more £250 billion
of additional capital to its normal operations.”
The FTSE 100 drops like a stone
Britain’s benchmark share index, the FTSE 100 plunges more than
500 points as the markets open.
European stocks crashed in a straight line at the open. There
were fears that falls were so big that the London Stock Exchange
would halt trading as automatic circuit breakers were triggered.
The index gradually recovered over the course of the day and has
gained 17% in the year since the result.Investing.com
Banking stocks were the biggest victims of the early morning
stock market crash, with the likes of RBS, Barclays, and
Lloyds losing in excess of 30% of their market value in a matter
Contagion spread across the globe with US stock futures tanking,
bourses all around Europe witnessing enormous losses.
Germany’s DAX ended the day 6.8% lower, while France’s CAC was
close to 8% down at the close.
Bank CEOs react
Goldman Sachs CEO Lloyd Blankfein told his staff there was
“no immediate change to the way we conduct our business,” while
JPMorgan’s Jamie Dimon said: “There are no changes to the
structure of our clients’ relationships with JPMorgan Chase or
their ability to work with our firm.”
In the UK, Barclays CEO Jes Staley told employees that he did
“not pretend to have all the answers” after the vote and Lloyds
boss Antonio Horta-Osorio
moved to reassure staff that the bank’s contingency plans in
event of a Brexit were being activated.
Gold goes bananas
price of gold jumps more than 5% as investors looked for the
safety provided by the physical presence of the precious metal.
Analysts project that gold’s rally will continue.
“The argument for a gold rally is straightforward,” said James
Steel, chief precious metals analyst at HSBC. “The uncertainty
spurred by this vote will likely elicit sufficient gold purchases
to buoy prices. The link is the interconnection between gold and
wider financial markets.”