Monday 27 June 2016

Brexit Continues to Trouble Markets

Britain's vote to leave the European Union is still causing turmoil on global stock markets, with prices falling in the United States and Europe. Earlier Monday, a key index in Japan recovered some of the drastic losses it saw in Friday's trading.

In New York, the Dow and the S&P 500 were off more than one percent in Monday's early trading. London's FTSE fell two percent.

Worries that leaving the EU will hurt the British economy pushed the value of the British pound down further. Concerns that an economic slowdown would cut demand for energy sent crude oil prices down further on world markets.

Brokers react on a trading floor at BGC, in the Canary Wharf financial district of London, June 27, 2016.
Brokers react on a trading floor at BGC, in the Canary Wharf financial district of London, June 27, 2016.

In an effort to reassure British and global investors, Britain's finance minister, Chancellor of the Exchequer George Osborne said “Our economy is about as strong as it could be to confront the challenge our country now faces.”

Asian markets

Earlier in Asia, Japan's prime minister helped calm trading in Tokyo's key stock market index, which advanced about 2.4 percent, recovering some of the ground lost in Friday's drastic global sell off. Shinzo Abe urged Japanese officials to cooperate with other major nations.

People walk by an electronic board displays exchange rate of euro, left, and British pound at the securities firm in Tokyo, Monday, June 27, 2016.
People walk by an electronic board displays exchange rate of euro, left, and British pound at the securities firm in Tokyo, Monday, June 27, 2016.

Some analysts speculate Japan might break a promise to its G7 partners not to intervene in the currency market after the yen surged against the U.S. dollar in reaction to Brexit. A more expensive Japanese currency makes Japan's exports, a crucial part of its economy, more expensive and less competitive on global markets.

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