Equities sell off for second day, safe-havens up in Brexit aftermath
By Hilary Russ
NEW YORK (Reuters) - Global markets sold off for a second straight day on Monday, dragging the British pound to a 31-year low, while gold and safe-haven government debt rallied on Britain's shock vote last week to leave the European Union.
Major U.S. stock indexes recorded their worst two-day drop in about 10 months. Banking stocks led losses amid uncertainty over London's future as the region's financial capital.
On Wall Street, the S&P financial index .SPSY fell nearly 2.79 percent. Declines for JPMorgan (JPM.N: Quote) and Bank of America (BAC.N: Quote) grew as the day wore on, with the shares down 3.34 percent and 6.31 percent respectively.
An index of European bank shares fell 7.67 percent. Royal Bank of Scotland (RBS.L: Quote) fell 15.1 percent, while Barclays (BARC.L: Quote) shed 17.35 percent, with both paring losses slightly through the day.
Bank stocks at a seven-year low helped push London's top share index .FTSE down 2.55 percent, shedding nearly 100 billion pounds (US $132 billion) and 5.6 percent over two days.
The Dow Jones industrial average .DJI fell 260.51 points, or 1.5 percent, to 17,140.24, the S&P 500 .SPX lost 36.87 points, or 1.81 percent, to 2,000.54 and the Nasdaq Composite .IXIC dropped 113.54 points, or 2.41 percent, to 4,594.44.
Britain's finance minister, George Osborne, sought to reassure markets, saying the world's fifth-largest economy was strong enough to cope with the Brexit-inspired volatility.
But the positive impact on sterling was only fleeting. Sterling GBP= sank to its lowest level against the U.S. dollar since September 1985, down 3.6 percent to $1.310, surpassing Friday's low. Continued...