Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Pound slides as Brexit alarm spreads

27 June 2016, 14:01

London - Britain battled to stop worldwide Brexit alarm Monday as sterling crumbled to a three-decade low against the dollar, while bank, airline and property shares plummeted.

Other world markets steadied a little after Britain's June 23 vote to abandon the European Union wiped $2.1 trillion off international equity values Friday.

Analysts warned of a volatile period ahead as global investors grappled with the financial consequences of the Brexit referendum.

"Today I want to reassure the British people, and the global community, that Britain is ready to confront what the future holds for us from a position of strength," Britain's finance minister, George Osborne, declared before European financial markets opened.

Britain's economy is "as strong as could be", the minister said.

The pound skidded to $1.3222 in morning London trade, its lowest level against the dollar since September 1985.

London's FTSE 100 index, which boasts many international companies, fell 1.5 percent in morning trade, masking steeper falls in key sectors likely to be affected by Brexit.

- 'Incredibly volatile' -

"George Osborne's comments have clearly prevented a much more dramatic decline Monday morning, but markets will remain incredibly volatile throughout the long-winded process of exiting the EU," said Interactive Investor equity strategist Lee Wild in London.

British budget airline EasyJet, which warned of a Brexit hit to sales, fell 16.0 percent. International Airlines Group, parent of British Airways and Iberia, dropped 9.4 percent.

Royal Bank of Scotland shares plunged 15 percent. Lloyds Banking Group fell 8.9 percent.

British construction group Taylor Wimpey tumbled 12.4 percent.

One fifth of British business leaders are considering moving operations abroad after the referendum, according to a survey from leading business lobby group, the Institute of Directors.

In eurozone equity trading, Frankfurt's DAX 30 index dipped 0.9 percent to 9,472.49 points and the CAC 40 in Paris shed 1.0 percent to 4,067.02.

In Madrid, shares eased, frittering away early gains after the ruling conservative Popular Party emerged on top in elections Sunday and vowed to try to form a government.

- Pound 'vulnerable' -

Stephen Innes, senior trader at OANDA Asia Pacific, warned sterling "is extremely vulnerable" and predicted an interest rate cut in the summer.

He also said there was "a huge concern that London's status as the global financial capital will crumble" if it losses its "passporting" rights, which permit banks to locate themselves in Britain while offering products and services in the wider EU.

But on equities markets, the Nikkei in Tokyo, Shanghai and Sydney markets advanced. Hong Kong slipped, however.

There are fears the British vote will usher in another global market rout just months after a China-fuelled sell-off at the start of the year.

Morgan Stanley economist Chetan Ahya tipped a new round of monetary easing in Asia to limit the fallout.

"We think near-term focus of policymakers will be to mitigate adverse impacts on financial conditions. Specifically, we expect policymakers to introduce liquidity injections measures," he said.

Japanese Prime Minister Shinzo Abe held an emergency meeting with top officials Monday morning to discuss how to deal with the market fallout.

- 'Tough week' -

"It is going to be a very tough week," predicted James Audiss, senior investment adviser at Shaw and Partners in Sydney.

"Unless an investor has a really strong view one way or the other, you'd be brave to buy in. It will be a really volatile week," he said.

Chinese Premier Li Keqiang said Britain's departure from the EU created new uncertainties in the world economy at a time when downward pressures on China's economy are mounting.

- Key figures around 0930 GMT -

London - FTSE 100: DOWN 1.1 percent at 6,073.32

Paris - CAC 40: DOWN 0.9 percent at 4,070.01

Frankfurt - DAX 30: DOWN 1.0 percent at 9,458.6

Madrid - IBEX 35: DOWN 0.3 percent at 7,764.10

Sterling: DOWN at $1.3222 from $1.3670 in New York on Friday.

Euro/dollar: DOWN at $1.035 from $1.1112

Dollar/yen: DOWN at 101.71 yen from 102.21 yen

New York - DOW: DOWN 3.4 percent at 17,400.75 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 20,227.30 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 15,309.21 (close)

Shanghai - Composite: UP 1.5 percent at 2,895.70 (close)

Pound/dollar: DOWN at $1.3253 from $1.3670 late Friday



Read more from our Users

Submitted by
Wilwon Ochieng
Deputy Governor's ally found with...

The EACC has recovered KES 2 million in fake currency from a close ally of Deputy Governor for Tharaka Nithi Eliud Mati. Read more...

Submitted by
William Korir
Mudavadi given permission to join...

Musalia Mudavadi has been ghranted permission by his party to join the CORD Coalition. Read more...

Submitted by
Victor Tinto
EACC officers raid Deputy Governo...

EACC officers raided the home of a Deputy Governor as theft case continues in court. Read more...

Submitted by
Wilson Ochieng
New IEBC bosses to be named Novem...

New IEBC bosses will be named on November 30. Read more...

Submitted by
William Korir
DP Ruto has spoilt my name, activ...

DP William Ruto has spoilt my name, activist complains. Read more...

Submitted by
Wilson Ochieng
Apologise for attack on Auditor G...

Apologise for attack on Auditor General, President Uhuru Kenyatta is told by Kisumu Senator Anyang Nyong'o. Read more...