Markets in crisis mode as U.K. votes to leave European Union

Investors around the world went into crisis mode as results showed British voters have chosen to leave the European Union in a stunning decision.

Amid extremely volatile trading, the pound plunged more than 11% to below $1.33, its lowest level since at least 1985. The euro also fell heavily.

With more than 85% of the vote counted, CNN predicted that the Leave campaign would win. Leading British media outlets also called the result for Leave.

The panicked mood prompted wild swings in Asian stock markets. Japan’s Nikkei plummeted 7.6%. The Hang Seng in Hong Kong dropped 4.7%.

Investors turned to safe haven assets like the Japanese yen, which soared against the dollar. Gold jumped around 6%.

Markets in the U.K. will open Friday at 8 a.m. local time / 3 a.m. ET. London stock futures are trading around 7% down. U.S. stock futures are also lower.

British bank stocks traded in Hong Kong were hit especially hard — HSBC fell more than 11%, and Standard Chartered nosedived more than 12%.

“The markets have been betting on remain in the past few days, and when the first results came in, that has reversed,” said Vicky Pryce, an economist and former U.K. government official.

Pryce was watching the results come in at the London School of Economics, where the mood was very nervous.

Most of those attending — and most expert economists — wanted the U.K. to remain in the European Union. They are worried “Brexit” could hurt the U.K. economy and crash the pound.

“I’ve just seen my salary vaporize,” Luis Garicano, LSE professor of economics and strategy, said as the pound tumbled after the first results were announced.

On Thursday, investors had been growing increasingly confident that the country would vote to remain a member of the 28-nation bloc. The pound made gains, and U.S. and European stocks rose.

Concerns over Britain potentially choosing to leave the EU have caused turmoil in international markets in recent weeks. The FTSE 100 seesawed violently and the pound was more volatile than even during the 2008-2009 financial crisis.

A record number of voters registered to vote in the referendum. Fierce campaigning has split the country down the middle, with opinion polls ahead of the vote too close to predict the result.

The campaign was temporarily suspended after the killing of Labor MP Jo Cox last week.

Migration and the the economy dominated the debate.

Some at the LSE election party said the debate was the first time positive things about the EU were said in the U.K., traditionally very “euroskeptic” country.”

“But three months of campaign can’t undo 40 years of collective negativity about the European Union and migrants,” professor Conor Gearty said.

Campaigners for a British exit (Brexit) say the U.K. can only control immigration if it leaves the EU, which insists on free movement of people across the union. Campaigners for Britain to remain an EU member say walking out of the biggest free trade area in the world would do irreparable damage to the economy.

— Felicia Wong, Sophia Yan and Judy Kwon contributed reporting.

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