Stocks crash as UK vote to quit EU shocks investors

LONDON (AP) - Stock markets crashed, oil prices tumbled and the pound fell to a 31-year low on Friday as Britain's unprecedented vote to leave the European Union shocked investors and dragged the region, the world's largest economic bloc, into a new era of uncertainty.

Investors rushed to dump European shares as soon as markets opened, following earlier drops in Asia, and Wall Street was set to fall sharply amid concerns about the economic consequences of the vote. The move could drain confidence among companies and business across the EU, which some fear could even face more defections.

Britain's FTSE 100 plunged about 8 percent but recovered slightly for a 5 percent loss. The German index tanked 7 percent and France's index tumbled about 9 percent. Wall Street was due to open sharply lower, with Dow and S&P 500 futures down 2.8 percent and 3.6 percent.

The pound hit its lowest level since 1985, diving as much as 11 percent before recovering slightly to trade 8 percent lower at $1.3704. Oil prices tumbled, with the U.S. benchmark $2.24 lower at $47.87 a barrel. The Nikkei 225 closed down 8 percent, its biggest fall since the global financial crisis in 2008.

The result of the vote, which trickled in overnight in Europe, caught investors by surprise. Markets had rallied on Thursday on hopes that a so-called "Brexit" would be avoided and bookies were giving the "remain" camp a high probability of success.

"U.K. voters have opted for Brexit. If fully followed through, this will be an act of economic self-harm with global ramifications," said Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics.

Britain's decision to leave the EU launches what will be years of negotiations over trade, business and political links with the EU, which will shrink to a 27-nation bloc. Above all, it creates uncertainty, which is toxic to businesses looking to making investments or consumers looking to make purchases.

It could also threaten London's position as one of the world's pre-eminent financial centers as professionals could lose the right to work across the EU. The U.K. hosts more headquarters of non-EU firms than Germany, France, Switzerland and the Netherlands put together.

The Bank of England said it had made contingency plans for a "leave" vote and promised to take action to maintain stability. It noted that it has 250 billion pounds ($342 billion) in liquidity available for banks. "We are well prepared for this," the bank's governor, Mark Carney, said in a televised statement.

That seemed to help confidence somewhat, particularly in financial stocks, which were among the hardest hit. Shares in Barclays bank in London had tanked as much as 30 percent before settling for a 20 percent drop.

Banks have the most to lose in Britain's departure from the EU as they do a lot of cross-border activity, which is facilitated in the EU, which has no borders, tariffs, or limits on the movement money and people.

Japan's Nikkei 225 finished the wild day at 14,952.02 down 7.9 percent while South Korea's Kospi sank 3.1 percent to 1,925.24, its biggest fall in four years. Hong Kong's Hang Seng index tumbled 4.4 percent to 19,942.90 and Australia's S&P/ASX 200 fell 3.2 percent to 5,113.20. Stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.

"Financial markets throughout the night have been chaotic to say the least," said Craig Erlam, senior market analyst at Oanda in London. "All eyes will now be on central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan."

In other currencies, the dollar fell to 102.44 yen from 104.80 yen while the euro weakened to $1.1052 from $1.1320.

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Kirka reported from London. Kelvin Chan in Hong Kong also contributed to this report.