London: As concern grew over the potential economic costs of Britain's vote to bring its country out of the European Union, European stocks and the pound fell further today, adding to Friday's record one-day decline.
Slumping to its lowest level since 1985, the British pound dropped 2.4 per cent to $1.3352 (Rs 90.71), despite the British Treasury's reassurances that the economy was strong enough to withstand the uncertainty.
Wall Street was set to drift lower on the open, too, with futures for the Dow Jones industrial average and the Standard and Poor's 500 index down 0.3 percent each.
Traders were watching for more aftershocks as other EU leaders press London to start the complex process of leaving the 28-nation trading bloc. Prime Minister David Cameron wants to wait several months.
"Markets will be nervous given that the EU and U.K. have some mismatch in terms of timing of exit procedures and negotiations," said Mizuho Bank analysts in a report.
"The EU's legitimacy may be tested by separatist parties," it said. "Spanish elections more immediately and then French elections in 2017 add to the complexity of political dynamics involved in negotiations. Brewing uncertainty suggests that the stage is set for potentially stormy global markets."
In the first direct reflection of business sentiment in Britain, a leading business group said Monday that 20 percent of its members plan to move some of their operations outside of the U.K. in light of the country's decision to leave the EU. The Institute of Directors said that a survey of its 1,000 members showed that three out of four believe that Britain's exit from the EU, or Brexit, will be bad for business.
