London pre-open: Stocks to tumble as UK votes for Brexit

London stocks were expected to tumble at the open as voters in Britain opted to leave the European Union.

Results of the referendum showed a Leave win at 52%, with Remain at 48%. London, Northern Ireland and Scotland backed Remain, while the rest of England and Wales opted to leave.

The pound fell to its worst level against the dollar since 1985 and the FTSE 100 was seen opening 520 points lower than Thursday’s close at 5818.

Markets in Asia crashed on Friday; the Nikkei lost over 8% and the Hang Seng fell more than 4%, while the yen surged past 100 per US dollar for the first time since November 2013 on its safe-haven appeal.

Mike van Dulken, head of research at Accendo Markets, said: “Following a one-week rally on hopes that the campaign tide had turned back towards Remain, we expect the hardest hit stocks to be financials (banks, insurance) followed by housebuilders, with commodities related-names (miners, oil) following close behind.”

Meanwhile, Oanda’s Craig Erlam said the focus will now shift to central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan, both of which have seen substantial movements today.

“The BoJ was already complaining about the speculative driven strength in the yen and given the moves today, they may now seriously consider some form of intervention.”

Morgan Stanley said: “We think that the uncertainty after a vote to leave will have two immediate effects. First it will hit sterling, as uncertainty reduces non-residents' appetite for UK assets against the background of the UK's record current account deficit.

“Second, it will hit growth, as firms hold back on investment, and households increase precautionary savings. Longer term, we expect a less open and more volatile economy, with reduced inflows of capital and labour, and a lower rate of potential growth.”