The $2.08 trillion wiped off global equity markets on Friday after Britain voted to leave the European Union was the biggest daily loss ever, trumping the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987, according to Standard & Poor’s Dow Jones Indices.
Global markets skidded following the unexpected result from the June 23 referendum, in which Britons voted to withdraw from the EU by a 52 percent to 48 percent margin.
Markets in mainland Europe were hit the worst, with Milan . FTMIB and Madrid . IBEX each down more than 12 percent for their biggest losses ever. Britain’s benchmark FTSE 100 . FTSE was down nearly 9 percent at one point on Friday, but rallied to close down 3.15 percent.
The route started in Asia, with the Nikkei . N225 down 7.9 percent, and carried over into Wall Street as the S&P 500 fell 3.6 percent.
Mohit Bajaj, director of ETF trading solutions at WallachBeth Capital LLC in New York, said the severity of the sell-off was partly due to investors misreading the outcome and betting the wrong way.
This post was published at David Stockmans Contra Corner on June 27, 2016.