Dow Jones and Asian markets in a sea of red

THE Dow Jones futures plunged 700 points at one point in pre-market trading, on the historic move that Britain had voted for a Brexit.

It was a sea of red across Asian markets, with many still disbelieving that the United Kingdom was officially out of the European Union.

Clearly showing that the “Leave” results were not priced into the market, Brexit affected every asset class across all regions globally. Chaos reigned everywhere.

The FTSE 100 tumbled 530 points, or 8.4%, within the first few minutes of trading. Brent crude oil, the international benchmark, was down to as low as US$47.54 from its high of US$50.90 on June 23, also marking one of the largest single-day plunges over the last two years.

Brexit is hammering stocks as bonds rally and investors flock into safe havens like gold, yen and top-rated government debt.

Gold rose beyond the US$1,300 an ounce mark to its highest level in two years.

The yen soared 7.2% to 98.92 against the greenback, before stabilising at the 102.5-yen level. That was the first time it had fallen below the 100 mark since late 2013.

The Swiss franc also strengthened by 1.8% against the euro. At these levels, the Swiss National Bank has confirmed currency intervention.

While foreign currencies were strengthening against the sterling, yields on US treasuries were falling, a sign of a flight to safety among investors.

The US 10-year treasury futures jumped over 2 points in a rare move for Asian hours. Yields on the cash note fell 24 basis points to 1.49%.

This is the steepest one-day drop since 2009 and the lowest yield since 2012.

Japan’s Topix was down 7.3% with the Nikkei 225 falling 7.9%. The Hang Seng index closed 3.54% to 20,128.59.

The FBM KLCI was not spared, with the index tumbling 16.98 points ot 1.04% to 1,623.18.

In Australia, the ASX index was down 3.8%.

The Chinese markets were lower, with the Shanghai Composite Index down 1.3% and the Shenzhen Composite down

0.76%.

Wires report says the Bank of England is in touch with other major central banks ahead of the market open there and the Bank of Japan governor Haruhiko Kuroda says it was ready to provide liquidity if needed to ensure market stability.

Some analysts say that the uncertainty caused by Brexit may now even prevent the Federal Reserve from raising interest rates as planned this year.