Brexit result: global markets surge ahead of EU vote count

Asian stocks have plunged and oil markets have gone into free fall as all signs point to a Brexit.

Traders in the options pit at the Chicago Board Options Exchange, amid trading ahead of the UK vote result.

Asian stocks have plunged and oil prices have been hammered as it appears Britons have voted to quit Europe.

Tokyo stocks went into a hair-raising dive on Brexit fears, plunging more than six per cent, as Asian forex and equity markets swung wildly on news from the EU referendum.

World oil prices also plunged more than 5 per cent in Asia after early results of the historic vote showed Britain increasingly moving to exit the European Union.

In Australia, the ASX 200 slumped nearly 4 per cent in early afternoon trade.

Market plunges worsened as the BBC called the vote in favour of the Leave campaign.

US stocks are also eyeing heavy falls, with futures pointing to losses of 3.5 per cent.

In the weeks leading up to today’s historic vote, there had been widespread warnings that a vote to leave the bloc would cause another rout across global markets that would wipe trillions off valuations, just months after a painful China-fuelled sell-off.

And as results came in, the doomsday scenario seemed to be unfolding. The pound had earlier topped $US1.50 following predictions the “remain” group would win but as the “leave” camp continued to post victories around the country, traders put in sell orders. The dollar slumped briefly to 99.02 yen, the first time it has gone below 100 yen since November 2013.

The Japanese unit is considered a safe bet in times of uncertainty and turmoil. The seemingly likely outcome in favour of exiting has upturned expectations, which had been for a tight race narrowly won by the “remain”, while bookmakers had said there was a 90 per cent chance of staying in.

Highlighting the volatility across all markets, betting giant Ladbrokes tweeted: “Without doubt the craziest, fastest moving political betting market in recent history.”

On equity markets Tokyo was down 6.7 per cent, Hong Kong tumbled 3.6 per cent, Sydney shed more than three per cent and Seoul was 1.5 per cent off. Shanghai and Singapore each sank 1.4 per cent, while Taipei, Wellington, Manila and Jakarta all saw sharp losses.

Highlighting the extent of confidence in a Leave vote, the major local stocks with links to the UK market were off over 10 per cent.

Clydesdale Bank and Henderson Group have plunged 12 per cent, while BT Investment has tumbled 10 per cent.

LIVE: Britain’s EU vote

The pound plunged to $US1.357, which represented the weakest mark for the currency since 1985.

Remarkably the currency has gone from a seven-month high to a 31-year low in just over six hours.

Meanwhile the British Pound gold price has rocketed over 15 per cent since 8am — its biggest rise on record — to £963.67 per ounce.

The Australian dollar also dived on the new-found risk aversion, sliding from a seven-week high of US76.4c at the close of the UK polls to US74.7c at 11.05am (AEST).

It was back above US75.3c at 11.45am (AEST).

A rally on offshore markets had led futures markets to point to a 1 per cent gain for the S & P/ASX200 at the open, highlighting how quickly sentiment has shifted.

“Throughout Asian markets, while results are being received, a Brexit carries with it the potential for flash crash,” easyMarkets Senior Dealer Andreas Tjahja said.

The local stock with the most to lose from a Brexit vote is NAB spin-off Clydesdale Bank, which derives 100 per cent of its revenue from the UK. It tumbled 2.8 per cent to $5.39 at 11.45am (AEST). At its low it was off 6.8 per cent.

UK futures served as the major laggards, down 5 per cent at 11.50am (AEST). Futures markets in the US were pointing to more modest falls of 1.1 per cent.

The pound was already trending lower ahead of the Sunderland result from its high of $US1.50 — reached as voting closed — as poll results in Newcastle showed a more marginal Remain vote than expected.

Earlier, the $US1.50 peak in the pound represented the UK currency’s best mark since December 16 last year as strong buying was driven by hedge funds who had been running their own polling around the UK.

“I think the big question on everyone’s mind will be: was the private exit polling that some hedge funds paid for worth it after all?” IG market analyst Angus Nicholson said.

It was only eight days ago the pound had slid to $US1.41 as the prospect of a Brexit gathered momentum.

It sat at $US1.447 as of 11.50am (AEST), a sign investors are unsure as to where to place their bets. A Brexit vote will drive it to $US1.40, while a Remain vote could see it retest $US1.50.

At 11.50am (AEST), the Remain vote held a slight advantage of 50.1 per cent to 49.9 per cent, although we are less than 20 per cent of the way through the tallying.

Earlier today, global bourses surged as investors switched out of safe havens and into riskier assets as betting markets suggested Britons would vote to remain in the European Union.

Although polls overnight were still showing a neck-and-neck race, investors took comfort from bookmakers’ predictions that the European project would finish the day intact, if shaken.

Trade on Wall Street was steady, with the major indices holding in positive territory during the session and rallying to close around 1.3 per cent higher.

“People are expecting that Britain is going to vote to stay in the EU based on what’s happening here, particularly with the fact that financials are leading,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Illinois. “They view the potential disruption of a British exit as a major financial event. The relief rally, makes sense, would be strongest among those names.”

Across the Atlantic, the UK’s FTSE 100 added 1.2 per cent, while the British pound added 1.2 per cent against the US dollar to hit its highest level since December, as traders switched their cash out of the safe haven greenback and back into the British currency.

The pound later sank again after the strong “Leave” showing in Sunderland, in northern England.

Continental markets had seemed even more pleased at the prospect of retaining all 28 members of the bloc. Germany’s DAX 30 soared 1.9 per cent and France’s CAC 40 surged 2 per cent.

Another safe haven, gold, fell 0.5 per cent as funds flowed back into riskier assets.

Oil benefited from the switch to risk-on, rising to a two-week high and closing back above the $US50 a tonne threshold.

With Elizabeth Redman