Local stocks lose close to $50bn

The local sharemarket has been whacked by Britain’s vote to exit the European Union.

The Australian sharemarket has suffered its worst decline in nine months, with close to $50 billion wiped after UK voters opted to leave the European Union.

The shock Brexit vote caught markets off-guard after investors had this week grown increasingly comfortable with the prospect of a ‘remain’ vote.

At the close of local trade, the benchmark S&P/ASX 200 index tumbled 167.5 points, or 3.17 per cent, to 5,113.2, while the broader All Ordinaries index sank 165.8 points, or 3.09 per cent, to 5,192.8.

“Today’s market moves are in part about thin liquidity in currency markets and about markets getting it wrong by removing risk premium in the run up to the event,” CMC Markets chief market analyst Ric Spooner said.

“Uncertainty and the inclination to take a safety first approach naturally drives markets in unprecedented circumstances like these.

Mr Spooner noted, however, that there may be a buying opportunity next week should traders overreact.

“Over coming days, long-term investors will be looking to make a hard headed assessment about whether value is being created, especially for many Australian stocks which are removed from many of the immediate economic implications of Brexit,” he said.

The losses were driven by the materials, financials and energy sectors, with all three losing between 3.5 and 4 per cent on the day.

Among the big banks, ANZ slid 4.1 per cent to $23.44, Commonwealth Bank lost 3.2 per cent to $72.57, NAB eased 3.8 per cent to $24.61 and Westpac dived 4.4 per cent to $28.34.

The falls seemed mild in comparison to those of UK-exposed groups such as NAB spinoff Clydesdale Bank, which plunged 17.5 per cent to $4.57.

Elsewhere, Henderson Group tanked 12 per cent to $4.46 and BT Investment Management nosedived 14.2 per cent to $8.71.

Clydesdale derives all its revenue from the UK, while Henderson and BT receive more than 60 per cent of their sales from UK operations.

The mining giants also endured a rough day, with BHP stumbling 7.9 per cent to $17.54 and Rio Tinto giving back 6.5 per cent to $42.83. Iron ore miner Fortescue lost 7.4 per cent to $3.27.

In energy, Santos slipped 5.5 per cent to $4.68 and Woodside Petroleum weakened 3.1 per cent to $25.77 as oil prices skidded 6 per cent during Asian trade.

The one positive showing came in the gold sector as miners of the precious metal received a major boost from a safe haven hunt.

Gold gained 6 per cent to a two-year high, with Newcrest surging 8.8 per cent to $23.55 and Regis Resources jumping 8 per cent to $3.52.

Only 12 stocks rose on the benchmark ASX 200 for the day, while only seven gained more than 1 per cent.

The seven most significant outperformers were all exposed to gold, highlighting the flight to safety that took place during the session.

Among blue chips, Telstra bucked the broader trend to edge up 0.19 per cent to $5.35, while Qantas tumbled 5.5 per cent to $2.75.

Meanwhile, the Australian dollar was crunched, backtracking US2c to US73.8c by the end of the local session.