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Business

World stocks in freefall as UK votes for EU exit

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Business

World stocks in freefall as UK votes for EU exit

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COMING UP:World stocks in freefall as UK votes for EU exit

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00:00:00
>> World stocks in free fall as the UK votes to leave the EU. Sterling suffering historic falls, London's FTSE tanking at the open, and major stock markets around the world clocking up losses of up to 10%. Reuters Chief European Equities correspondent, Vikram Subhedar, says markets totally mispriced the vote by more than a million votes.
00:00:22
>> Well there was a bit of complacency, I think, and once the Remain camp started to pull ahead in the polls, anyway, the last week people thought, okay there was a scare We're okay now, and we start coming back and pricing in the Remain. And so people bought banks, people bought stocks, people bought Sterling again, and sold the safe haven assets like gold and the Yen.
00:00:46
So they were just not positioned for something like this to happen.>> The Pound seen its biggest one day lost ever, slumping to its lowest level since 1985. All other world equity markets following suit. With investors stampeding to traditional safe haven assets, including gold, top rated government debt, and the Japanese yen.
00:01:07
The body blow to global confidence is now expected to stop the US Federal Reserve from raising interest rates this year. In fact it might even provoke a new round of emergency policy easing from all major central banks.>> Well the key thing from Bank of England would be to reassure markets.
00:01:24
And saying something like we are going to intervene will almost send markets into more of a tailspin. So that's what they're not doing. They're saying we're watching. They've made a statement saying that they're in contact with all the banks. They are going to provide liquidity as and when required.
00:01:35
And that's the extent to which they want to commit at the moment.>> Theorists know that this vote may lead the UK into recession or even prompt a global downturn over the next 80 months. This isn't the same as the layman crash back in 2008, but it may look and feel like it on the markets for Friday at least.