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[LONDON] European stock markets and the British pound plunged at the start of trading Friday after Britain voted to leave the European Union, with banking stocks leading the way down.
London's FTSE-100 index was down 5.0 per cent around 0745 GMT off earlier lows with banking stocks Royal Bank of Scotland, Barclays and Lloyds all losing close to a quarter of their market value.
"The British people have voted against the economic warnings of the overwhelming majority of expert economic opinion. Not surprisingly, this morning the referendum result has sent shockwaves through global financial markets," said Daniel Vernazza, economist at UniCredit Research.
In the eurozone, the damage was even greater, with the Paris CAC-40 index falling by over 10 per cent. Financials BNP Paribas and Credit Agricole plunged by 17 per cent, while Societe Generale dropped 21 per cent.
The Frankfurt DAX index also dropped by over 10 per cent at one point, before recovering somewhat to a 8.7-per cent decline. Banking stocks Deutsche Bank and Commerzbank both plummeted by over 16 per cent.
Among smaller European exchanges, Madrid fell nearly 12 per cent, Athens by 15 per cent, Amsterdam nearly 9 per cent, Prague 10 per cent and Warsaw by nearly 8 per cent.
Sterling crashed 10 per cent to US$1.3229 at one point, its weakest level since 1985, while the greenback itself slumped below 100 yen for the first time in two-and-a-half years as traders fled to safety.
With stock market investors heading for the exit across Europe, they also sought the relative safety of government bonds. The price on the German benchmark 10-year sovereign bond rose sharply, pushing its yield into negative territory for only the second time in its history.
UK government bonds also rose, taking their 10-year yield to a historic low.
Gold, a traditional refuge asset, struck a two-year high.
The Swiss franc, another favourite for jittery investors, also rose sharply, prompting Swiss central bank intervention in the foreign exchange market to cap the rise.