U.K. Voters Prefer to Leave European Union, Pound Plunges 10%

Sarla Buch
24 Jun, 2016
New York City

World markets dived and the U.K. pound plunged 10% after voters in the U.K. favoured to leave the European Union. London Stock Exchange and Deutsche B

[R]4:00 PM Frankfurt – World markets dived and the U.K. pound plunged 10% after voters in the U.K. favoured to leave the European Union. London Stock Exchange and Deutsche Börse are committed to merger agreement of $20 billion. Henkel agreed to acquire the U.S.-based Sun Products €3.2 billion.[/R]

European markets went in tail spin after voters in the U.K. favoured to leave the European Union, the first exit from the economic block set up among the 28 nations.

More than 72% voters participated in the referendum that was promised by the Prime Minister David Cameron in 2013 to silence the Euro-sceptic and strengthen the U.K. position in the union that has evolved to include nations small and large in Europe.

In a bitterly fought campaign over four months, Prime Minister David Cameron led the campaign to remain in the European Union and staked his credibility on the outcome.

Cameron announced his resignation after the final count and urged the new leaders to guide the nation and work with the EU committee and start the two-year long process of leaving the union.

The decision is almost likely to lead to another attempt in Scotland to break away from the U.K. and for the fifth-largest economy in the world to negotiate trade treaties and implement the same policies without the benefit of the influencing the policy as a member of the union.

World financial markets went in tail spin and leading indexes in Asia, Europe and in the North America dropped more than 2%. The U.K. pound dropped as much as 10% and financial services providers and banks plunged in London trading.

In London trading, FTSE 100 index declined 187.35 or 2.9% to 6,153.44 and in Frankfurt the DAX index plunged 607.98 or 5.9% to 9,645.45.

In Paris, CAC 40 index tumbled 308.99 or 6.9% to 4,157.42.

For the week, FTSE 100 index jumped 2.5% and the DAX index rose 0.2% and the CAC 40 index slipped 0.9%.

Elior Group declined 4.1% to €19.57 after the France-based Europe''s third-largest catering group’s chairman and chief executive said before the end of the year it plans to acquire one business in the United States and one in the U.K..

The London Stock Exchange Group Plc plunged 8.8% to 2,494 pence after the U.K.-based trading platform provider and Germany-based Deutsche Börse AG said that they remain committed to binding terms of the merger deal of $20 billion.

Under the terms, shareholders of LSE would own 45.6% of the combined group while Deutsche Börse shareholders would own 54.4%.

Telford Homes Plc tumbled 14.7% to 309.56 pence after the U.K.-based property developer said group revenues in the year ending in March soared 41.6% from a year ago to £245.6 million.

Net profit in the year surged 30.5% from a year ago to £25.7 million compared to £19.7 million and diluted earnings per share jumped to 38.9 pence from 32.6 pence.

Henkel AG & Co KGaA gained 1.2% to €93.95 after the Germany-based consumer products group agreed to acquire the U.S.-based laundry and home care company The Sun Products Corp from private equity firm Vestar Capital Partners for about €3.2 billion or $3.6 billion including debt.