The global stock markets plummeted following the result of the Brexit referendum. The British people voted for the United Kingdom to leave the European Union (EU), which prompted the resignation of Prime Minister David Cameron.
In the United States, the Dow Jones Industrial Average (DJIA) declined 3.39% to 17,400.89 points and the S&P 500 dropped 3.60% to 2,037.34 points. The NASDAQ fell 4.12% to 4,707.98 points and the Russell 2000 went down 3.72% to 1,128.59 points.
Canada’s S&P/TSX 60 dropped 1.9% to 808.55 points while Brazils Bovespa stock index went down 2.97% to 50,028.12 points at the time of this writing.
The European stock markets also suffered significant losses. London’s FTSE 250 index fell 7.19% to 16,088.05 points and FTSE 100 down 3.15% to 6,138.69 points. Germany’s DAX index declined 6.82% to 9,557.16 points and France’s CAC 40 index plunged 6.24% to 4,106.73 points.
In Asia, Japan’s Nikkei 225 slid 7.92% to 14,952 points and Hong Kong’s Hang Send Index dropped 2.95% to 20,253.51 points. The Shanghai Composite tanked 1.3% to 2,854.29 points.
Britain needs a new leader to its next destination
Prime Minister Cameron led the Stay campaign as he believes that the United Kingdom is safer, stronger and better off inside the EU.
In a speech on Friday, Cameron said, “The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction. I do not think it would be right for me to be the captain that steers our country to its next destination.”
Investors are concern about the impact of Brexit
Investors sold their stockholdings due to concerns the Britain decision to exit the EU will impede the economic growth worldwide.
Dean Maki, chief economist at Point72 Asset Management told Bloomberg, “Market participants are right to be concerned. This is a legitimate risk-off event, and there are concerns about what’s going to happen. We’re likely to see weaker growth as a result of this, and it’s appropriate that markets are reacting to this.”
Stephen Wood, chief market strategist for North America at Russell Investments, said, ‘“This is going to take a large number of trading days, if not weeks, to iron through. There were a lot of surprise positions that had be unwound very, very quickly — that’s been a significant phenomenon. Some of that will probably be re-traced. Initial reactions tend to be more extreme than long-term averages.”
The stock price of Citigroup (NYSE:C) declined more than 9% to $40.30 per share. Its new partnership with Costco Wholesale Corporation (NASDAQ:COST) was greeted with a flood of complaints after customers experienced problem activating accounts and suffering lengthy wait times.
BlackBerry (NYSE:BBRY) declined more than 4% to $6.67 per share. Several brokerage firms reduced their price target for the stock to a range between $7 and $7.50 a share.
Invesco Ltd (NYSE: IVZ) tanked more than 13% to $25.56 per share. It is the worst performer on the S&P 500 index today.
The shares of Delphi Automotive (NYSE:DLPH) went down more than 12% to $62.06 per share.