European Market Reactions as London Opens Post "Brexit" Decision
- Currencies slightly balance on London open as desks go online
- More than half of the FTSE 100 stocks failed to open for trade initially
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European desks opened to a new reality today as the UK voters cast their votes and decided to “Brexit” from the European Union. The final results showed the “Leave” camp prevailed by 51.9% to 48.1% margin.
The market has seen extreme moves, and indeed “risk off” is apparently the order of the day. The FTSE 100 and DAX 30 both opened lower by more than 7% before stabilizing slightly after. This marked the worst drop for the FTSE 100 since 2008, and more than half of the stocks on the index failed to open initially. UK bank stocks took a major hit with Lloyds showing a drop of -30% while RBS was down -34%.
Currencies stabilized somewhat in the aftermath of some extreme moves as the British Pound and the Euro are seeing a bounce higher versus the US Dollar at the time of writing (The GBP/USD set a low around 1.32, while the EUR/USD traded near the 1.09 handle).
Volatility is expected to remain extremely elevated, which might suggest that trading this environment should be approached with caution (if at all)
FTSE 100 (CFD: UK100) 5-Minute Chart: June 24, 2016
DAX 30 (CFD: GER30) 5-Minute Chart: June 24, 2016
GBPUSD 5-Minute Chart: June 24, 2016
EURUSD 5-Minute Chart: June 24, 2016
USDJPY 5-Minute Chart: June 24, 2016
AUDUSD 5-Minute Chart: June 24, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.