Dow Index Drops More Than 600 Points as 'Brexit' Shocker Slams Markets

New York (Jun 25)  A "Brexit" shocker sent global equities, oil prices and currency markets into chaos Friday. U.S. stocks entered panic mode after the pro-exit vote sparked worries over political and economic instability across the pond. The S&P500 was down 3.6%, the Dow Jones Industrial Average fell 3.4%, and the Nasdaq declined 4.1%. The Volatility Index, otherwise known as the "fear" index, spiked 40%, to 24.14.

A vote for a "Brexit" blindsided world markets Friday morning after days of growing confidence that the United Kingdom would opt to remain in the European Union. The U.K. referendum resulted in victory for the "leave" campaign with 51.8% support. The results could have major political and economic implications for the region over the next two years and beyond as the country negotiates how exactly it will separate from the 28-nation bloc.

"The Brexit victory is a victory for uncertainty across international financial markets," said Nigel Green, founder and CEO of financial consultancy deVere Group. "Brexit-triggered volatility is now only just beginning; we can expect it to potentially last up to two years... The world's currencies, equities and bonds are now on a magical mystery tour -- at least in the short term."
Those arguing to leave the European Union said unelected EU officials held too much power over Great Britain, particularly in key issues such as immigration. Those wanting to remain believed staying in the EU would provide greater protection, more political power in global events and greater economic strength.

Prime Minister David Cameron, a supporter of the "Remain" camp, has announced his resignation. His successor will determine how to extricate the U.K. from the EU over the next two years.

Source: TheStreet