How Badly BrExit Hit the Global Stock Markets on June 24 & 25?

Immediately after the declaration of the outcome of the BrExit historic referendum in the United Kingdom, the global stock markets reacted, sharply and harshly, showing an extreme sense of anxiety. Global economy went through a sudden fall of approximately $3.0 Trillion in paper wealth within a short span of two days.

As analyzed by S&P analyst Howard Silverblatt, US financial markets alone suffered approximately $1.3 trillion with last two sessions were far worst to those of Great Global Financial Crises.

When I compiled the data for the 14 global stock markets, very interesting scenario appeared which is tabulated and analyzed below.

British Stock Market

FTSE 100 stock index fell by 5.615% during the period; June 23 – June 27, 2016 which is, apparently, natural as stock dealers and investors are normally more sensitive to the events around them. Unexpected BrExit proved to be a shudder for them and the decline in just 2 days was harsher than that of the Great Global Financial Crises 2008.

Index Points on

23-Jun

Points on

27-Jun

Points Changed Percentage Changed
FTSE 6,338.100 5,982.200 355.900 5.615

FTSE100

If the stockholders had analyzed the changing scenario a beneficial one for the Britons, the stock exchange evening would have been totally different, rather a pleasant one. On the other hand, the sudden global breakdown of financial and stock markets proved that their worst nightmare was true. Whole the World, collectively, identified the sensitivity of the upcoming story and tried to show the Britons the true picture, which they could not realize before the June 23.

North America Stock Markets Reacted Sharply

The 5 top and peer stock indices analyzed were:US-Stock-Changed-1

The 5 top and peer stock indices analyzed were:

S&P/TSX 14,131.380 13,689.790 441.590 3.125
S&P 500 2,113.320 2,000.540 112.780 5.337
NASDAQ 4,910.040 4,594.440 315.600 6.428
DJI 18,011.070 17,141.240 869.830 4.829
NYSE Composite 10,641.170 9,973.540 667.630 6.274
Mean 49,806.980 47,399.550 481.486 4.834

Gallery of 5 North American Stock Indices – Screenshots

The response of stockholders in North America was reflective of the long time allies. The fall of overall 4.834% during the June 23 – 27 was significantly lower than that of British Stock Market, indicating that Americans behaved more cautiously and thoughtfully. The long-tested bonds between United States, Canada and the UK are not only about the economy, defense, culture, political system, language, international politics but are also future-oriented. Against expectations, lower and restraint caution by Canadian stock market of 3.125% is puzzling. Despite being in the same Common Wealth of Nations and governed, nominally, by the same Royal Highness, Canada neither felt the tremors nor reacted abruptly.

Being in closely knit business and corporate links, disturbance vibrations jolted the American stocks as well. NYSE Composite and the NASDAQ looks to be in more profound mode than the FTSE 100 stock investors. The centuries old corporate partnerships were there to stumble due to anticipated perils which were not fondled by the British electorates but by the American investors.

Asian Stock Markets Were Indifferent Except Nikkei

The 5 prominent Asian stock markets analyzed were:Asian-Stock-Changed-1

Five Asian Stock Indices were:

SSE 2854.29 2895.7 41.410 1.430
STI 2793.85 2729.85 64.000 2.291
KOSPI 1831.41 1780.05 51.360 2.804
HIS 20868.34 20227.3 641.040 3.072
Nikkei 16238.35 15309.21 929.140 5.722
Mean 8917.248 8588.422 328.826 3.688

Gallery of Asian Stock Indices – Screenshots

As expected, Asian financial markets were somewhat indifferent to the startling and sudden change in the far-flung Europe except Nikkei. As a whole, the Asian stock markets fell by just 3.688% in the similar trend but Nikkei had a faster fall of 5.722%, as compared to the Asian trend – even higher than FTSE 100 of UK. On the other hand, Chinese stock prices rather increased by 1.430%.

Reactions of European Markets was Harsh & Perplexed

European Stock Exchanges Felt the severity of the Shock, desperately. Their unexpected and un-predicted comportment was a thing of wonder for the common Britons.

European-Stock-Changed-1

The European Stock Indices were:

AEX 449.860 411.620 38.240 8.500
SMI 8,023.050 7,594.490 428.560 5.342
CAC 4,465.240 3,984.720 480.520 10.761
DAX 10,257.000 9,268.660 988.340 9.636
Mean 5,798.788 5,314.873 483.915 8.560

Gallery of European Stock Indices – Screenshots

As the real partner and the competitor at the same time in the game, the European investors were stunned, rather traumatized by the fallout of the referendum results. No one was anticipating such harsh rejoinder from the UK voters as even the David Cameron, the UK Prime Minister, could not foresee such dramatic turnover.

I took these 4 stock indices; 4 were the major ones and one a somber one. Their average fallout was 8.560% which is approximately 34% higher than the FTSE 100, the major British financial indicator. It was a general babble in the GB that France is the major hindrance architect for the UK but against the expected behavior of the UK commoner, the France was so much depressed by the consequences of a referendum that its stock index fell by 10.761%, the highest in the World. The Same response was from the stock markets of Germany which fell by 9.363%.

The remarks from the German and French envoys to not to give UK any other chance to rejoin EU was not only a threat to the UK to rethink the decision but also merely a face-saving move.

SMI was disturbed but didn’t over-react.

All events on one side but one thing is clear; the World thought it to be an emotional and sentimental decision as the stock markets, around the World, returned to the normal, rather excelled the previous ones. Only French CAC and German DAX could not come to the previous scale though they recovered to a great extent.

The Gallery of Screenshots of Indices, as on June 27.

Is financial and corporate World looking toward the UK Parliament to rethink the decision? Decision of future is awaited!

Source: CNBC