After the UK’s decision to leave the European Union of Friday, the country’s investors have been faced with endless uncertainty about the economy.
The British pound has been recorded to fall more than 2% this morning.
While the skepticism seems to have settled after the initial shock on Friday, analysts say that investors are unaware of how much risk-related assets they should do away with to avoid losses.
Reports say that the investors are not just done selling off assets yet and that another 10% fall in share prices can be expected shortly.
British financial companies recorded huge pull-outs from large investor markets like Australia and Hong Kong on grounds that London-led financial services will no longer enjoy the ‘single-market’ preferential status as offered when they were part of the Union.
Investors continue to speculate the fates of both the UK’s as well as Europe’s economies, where there is also the possibility where other members of the Union may call for an exit or to dissolve the Union altogether.
On Friday the S&P futures fell to its 3 and half month record low, of 1,999. It floated around 2012.25 this morning after a 0.3% fall.
The Japanese Government however intervened to stabilize the Yen, showing an increase in the stocks like Nikkei with a 1.4% increase over the dramatic fall on Friday. While the dollar fell 0.6% against the Yen, many fear of a dollar dominated market in the future.
According to analysts, the strong lack of trust in investing the Europe or the UK will cause a divergence of cash-flows into Asia-Pacific markets especially among emerging ones who could benefit the most.
The 2% fall of the pound against the dollar is just a little short of making the mark for a 31-year low, where the pound last stood lowest at $1.3228 to the current $1.3399. The Euro also fell another 0.9% against the dollar.