World stocks in free fall as UK votes for EU exit

Such a body blow to global confidence could well prevent the Federal Reserve from raising interest rates as planned this year, and might even provoke a new round of emergency policy easing from all the major central banks. Risk assets were scorched as investors fled to the traditional safe-harbours of top-rated government debt, Japanese yen and gold. Billions were wiped from share values as Europe saw London's FTSE drop 6% in early deals, Germany's DAX and France's CAC 40 slump 7.5% and 9% and Italian and Spanish markets plunge more than 11%. The rout was compounded by the fact markets had rallied on Thursday having become increasingly convinced that UK voters would opt to stay in the EU. Britain's big banks took a $130bn battering with Lloyds and Barclays plunging as much as 30%. EMINI S&P 500 futures ESc1 were down 4% and Japan's Nikkei ended down 7.9%. The British pound collapsed no less than $0.18, easily the biggest fall in living memory, to hit its lowest since 1985. The euro in turn slid 3.2% to $1.1012 as investors feared for its very future. Having campaigned to keep the country in the EU, British Prime Minister David Cameron confirmed he would step down. Results showed a 51.9%/48.1% split for leaving, setting the UK on an uncertain path and dealing the largest setback to European efforts to forge greater unity since World War II. Sterling sank a staggering 10% at one point and was last at $1.3582, having carved out a range of $1.3228 to $1.5022. The fall was even larger than during the global financial crisis and the currency was moving two or three cents in the blink of an eye. "It's an extraordinary move for financial markets and also for democracy," said Richard Benson, co-head of portfolio investments of London-based currency specialist Millennium Global.