Markets react as Britain votes to leave EU

Great Britain voted to leave the European Union, resulting in the resignation of Prime Minister David Cameron and sending stock markets globally into turmoil.
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Great Britain voted to leave the European Union, resulting in the resignation of Prime Minister David Cameron and sending stock markets globally into turmoil.

The vote was 52 percent to 48 percent. Before the referendum, polls showed that the country was closely divided.

Reuters said that quitting the EU could cost Britain access to the EU's trade barrier-free single market and means it must seek new trade accords with countries around the world. A poll of economists by Reuters predicted Britain was likelier than not to fall into recession within a year.

The EU will be economically and politically damaged, facing the departure of a member with its biggest financial center, a U.N. Security Council veto, a powerful army and nuclear weapons, the news service added.

The world's biggest trading bloc will lose about one-sixth of its economic output.

"It's an explosive shock. At stake is the break up pure and simple of the union," French Prime Minister Manuel Valls said. "Now is the time to invent another Europe."

Bloomberg said the vote drove the pound to a more than 30-year low. Shortly before noon today in the United States, stocks were sharply lower. The Dow Jones industrial average had fallen 2.67 percent, to 17,530, the S&P 500 index had lost 2.78 percent, to 2,054.57, and the Nasdaq composite index was 3.22 percent lower, at 4,752.16.

“Right now, the markets are holding up a lot better than I would’ve thought between Europe and North America,” Frank Maeba, managing partner with Breton Hill Capital in Toronto, told Bloomberg this morning. “The central banks are saying all the right things and they’re flooding the market with liquidity so you have a more orderly move. You may be seeing some tactical rotation, the U.S. looks more solid now at least until the U.S. election.”

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