Stock markets lost $3 trillion after Brexit


World stock markets lost $3 trillion over two days of trading after the victory of the eurosceptics for a referendum on Brexit, which led to the sale of securities around the world, writes Financial Times.

Analysts say that the drop in the markets on Friday, June 24, when the results were announced of a referendum, due to the short-term closing of trading positions due to unfulfilled expectations for the victory of the opponents of Brexit. In turn, the loss Monday, June 27, due to a reassessment by investors of their long term investments in respect of concerns about possible negative consequences of voting results.

“The bottom line is that very few investors were prepared for the outcome of the referendum, which we received,” explained Nicholas colas, market strategist at Convergex. According to him, to recover losses investors need to see stability several factors, including the value of the pound, the Euro and stock financial institutions.

Index S&P Global Broad Market after the referendum fell 6.9%. This is the most severe two-day decline after the collapse of the financial crisis in November 2008. According to S&P Dow Jones Indices, the result became the 12th among the largest landslides in the history of observations. S&P 500 in two days lost almost $1 trillion — the fall was the third largest in monetary value.

“Momentous victory for supporters of Brexit has led to a surge in global volatility in the financial markets and the desire of investors to safety due to concerns over the strength of the European Union and the Euro. Us markets suffered due to the resulting reluctance of investors to risk,” said Michael Reilly, an analyst at asset management TCW.

The main losses occurred in stock markets in developed countries, which lost $2.8 trillion. In turn, emerging markets lost about $179 billion.