Financial markets incurred huge losses due to Britain’s decision to leave the European Union. Brexit caused around a record $3 trillion losses. Stock markets worldwide reacted to Brexit by large-scale sell-offs in equities, and $2.8 trillion got wiped off developed stock markets, while emerging markets lost $179 billion. Investors started restructuring their portfolios, long-term investments in particular, which resulted in sell-offs.
“The bottom line is that very few investors were positioned for the vote we got,” said Nicholas Colas, the chief markets strategist at Convergex. The British decision turned out to be a shock to everyone. It was hard to tell who would win until the very end. Unexpectedly, the Leave camp prevailed, though with a narrow margin. Now the global society has to change ordinary rules. As a result, the BMI (S&P Global Broad Market index) shrank by 6.9 percent over two days following the referendum outcome. It was the largest two-day fall since November 2008. The S&P 500 slid by 5.37 percent in two days, or 1 trillion dollars roughly. The US stock indices showed the sharpest tumble in 10 months.
