The FTSE 100 has plummented in early morning trading after the UK voted to leave the European Union in yesterday's referendum.
Sterling fell sharply on international currency markets - and now stands at its lowest level against the dollar for over 30 years. Early this morning it was trading at $1.32 - though had recovered slightly to $1.37 just before 9am. The euro has also fallen against the dollar.
London stock markets suffered a similar seismic shock. In early trading 8.7% was wiped off the value of the FTSE100. Worst hit were the banks and housebuilders - with some stocks falling by 35%.
But ordinary investors are urged to stay calm, consider their investment portfolios carefully and avoid any knee-jerk reaction to the market frenzy.
Laith Khalaf of Hargreaves Lansdown said: "Global stock markets have taken a Brexit hit, with European markets actually falling more than the Footsie. Safe haven assets have soared as investors sought security, with gold rising 5% and UK bond yields plunging to historic lows.
On the stock market, banks and housebuilders have been hit particularly hard this morning as markets try to factor in the Brexit effect on the UK economy.
Sterling has fallen to its lowest level for over 30 years , which will mean holidaymakers heading abroad in the coming weeks will have to dig extra deep to buy foreign currency.
Don't Miss Out On Any Bounce Back in Valuations
Investors should carefully consider their plans and avoid a knee-jerk reaction. The coming days are likely to be choppy on the stock market as it digests the ramifications of Brexit, and further falls are possible.
However markets will bounce back at some point, and investors who switch to cash risk buying back into the market at a higher level, and ending up in a worse position than if they had just stayed put."
Tom Stevenson, director for personal investing at Fidelity International said: “As expected, markets have reacted negatively to Britain’s decision to leave the EU with the FTSE 100 already falling 8% this morning. Markets dislike uncertainty and they now face this in spades. However, this is a moment for investors to take a deep breath and focus on their long-term investment goals."
"At times like these it is vital to keep a sense of perspective. As hard as it may be right now for investors to remain calm, it is important to remember that market volatility is a normal part of long-term investing and with the benefit of hindsight some of the most turbulent times in stock market history are barely visible on a chart of the market’s ups and downs.
An Opportunity to Buy Assets At Attractive Prices?
"Over time the risk of holding equities is usually rewarded and markets invariably overshoot in both directions. Market falls are painful but they create opportunities to buy high quality assets at attractive prices. I urge investors to avoid stopping and starting investments. Timing the market is fraught with danger because the best days in the market often come hot on the heels of the worst. Withdrawing from the fray can mean you miss out on these rallies and doing so can seriously compromise your long-term returns."
Chris Towner, chief economist at HiFX, says: “Since the outcome of the EU referendum has now become official, Sterling has dropped by 10% and has since found its footing. The reality has struck and with the exit campaign gaining more than a million votes over the remain campaign, the result is convincing enough.
"Although Sterling has stabilised, it is still trading at significantly lower levels than the close yesterday. Risks are high and are now dependent on the next steps taken.”
