Friday, June 24th, 2016

Brexit pulls world market down

Narada Desk | June 24, 2016 10:20 am Print
David Cameroon reacting to the verdict said the country needs fresh leadership and he will step down in three months

As the Britain’s decision to leave the European Union fanned speculation that a divided Europe would put another brake on already fragile global growth, the United States’ stock futures plunged triggering a brief trading curb.

Dow Jones Industrial Average futures dropped 500 points to 17,453. The pound slid the most on record to its weakest since 1985, while the yen rallied on demand for haven assets. Polling before the referendum had indicated a vote too close to call.

S&P 500 futures dropped as much as 5.1 percent just before 12:30 a.m. in New York, triggering a limit-down rule. The curb means the contract cannot trade at a lower price for the remainder of the overnight session.

In the referendum held on Thursday, results of which are coming in suggest that the leave camp is going to win by  a narrow margin. According to BBC forecast the leave camp has 52 percent votes against the remain camp’s 48 percent. This will make the Britain the first country to leave the European Union. The decision of the people of Britain would change the European world and the domestic politics of the UK in more than one way.

Reacting to the peoples verdict, British prime minister has said he will resign with in three month.  He said the country now requires fresh leadership.  UK cabinet is expected to convene tomorrow.

Financial and currency markets are reacted sharply to the historic developments unfolding in London. As the results start coming in  the financial markets plunged, and the value of pound also plummeted. Pound has plunged into its lowest levels since 1985.

The result will put a question mark on the political future of prime minister David Cameroon, who tirelessly campaigned for remain camp.

The  Brexit could see that the anti- European forces in  Britian gaining more political space. This would result in drastic change in  Britians politics.

Britian is the second largest economy  after Germany in the European Union. The exit of Britian would have dire consequence on the economic bloc raising questions of cohesion and direction of the European Block

“Dare to dream that the dawn is breaking on an independent United Kingdom,” Nigel Farage, the leader of the U.K. Independence Party, the party which forced the government to go for a referendum.

Though Brexit has become a reality, the withdrawal process from EU will be complex and time consuming.

London and Scotland voted strongly to stay in the EU but the remain vote has been undermined by poor results in the north of England, the forecast revealed at around 5.10 a.m. (9.40 a.m. Indian Standard Time).

Voters in Wales and the English shires have backed Brexit — Britan’s exit — in large numbers.

Referendum turnout was higher than at last year’s general election.

Labour’s Shadow chancellor John McDonnell said the Bank of England may have to intervene to shore up the pound, which lost 3 per cent within moments of the first result showing a strong result for Leave in Sunderland and fell as much as 6.5 per cent against the euro.

A Labour source said: “If we vote to leave, Cameron should seriously consider his position.”

But pro-Leave Conservatives including former London Mayor Boris Johnson and former Secretary of State for Education Michael Gove have signed a letter to Cameron urging him to stay on whatever the result.

The leave camp’s campaign was accused by many observers as xenophobic and some times even racist.

A labout Jo Cox was murdered for campaigning against the Leave camp