Stocks, pound futures fall as markets await Brexit fallout
Stocks dropped in the Middle East, British pound futures fell versus the dollar, and U.S. shares appeared headed for a slightly lower opening on the first full day of trading since global markets plunged after Britain's vote to exit the European Union.
The stock losses were mixed but it was possible there would not be a repeat of Friday's massive sell-off when big global markets open Monday. The Standard and Poor's 500 index was down 0.6 percent in premarket trading Sunday evening, but the pound fell just over 2 percent on the dollar.
The Saudi Tadawul index, the largest in the Middle East, closed 1.1 percent lower, but Egypt's EGX 30 saw a 5.54 percent drop.
Asset management firm Al Masah Capital raised the possibility of bargain hunting, saying Sunday that volatility wasn't necessarily bad and could give long-term investors the ability to purchase undervalued stocks.
Other Mideast indexes, which trade from Sunday to Thursday, also fell. Dubai's main index was down 3.25 percent. Abu Dhabi's index fell 1.85 percent.
What happens next depends on how policymakers handle the fallout in the coming days, Christine Lagarde, managing director of the International Monetary Fund, said at the Aspen Ideas Festival in Colorado on Sunday.
Economic risks, she said, depend on the level of uncertainty. "How they come out in the next few days is going to really drive the direction in which risk will go," Lagarde said.
The financial markets did not panic Friday after the vote, she said, adding that central bankers put a lot of liquidity into the markets so there wouldn't be a shortage, as happened during other market plunges, including in 2008.
"It was very much under control. We didn't see those sort of panic moves," she told the group.
Britain's vote to leave the European Union last week sent shudders through financial markets, causing the loss of an estimated $2.08 trillion of wealth on Friday from Hong Kong to London to New York.
The vote, which surprised pollsters, brought more political turmoil Sunday. Scotland's leader threatened to block the move, while European leaders stepped up the pressure on Britain to begin its complex extrication from the 28-nation EU immediately, rather than wait several months as British Prime Minister David Cameron prefers.
With London's jittery stock market set to reopen Monday, the leaders of the successful campaign to leave the EU stayed largely out of the public eye, offering few signals about their plans.
Scotland, however, was not silent. Popular First Minister Nicola Sturgeon said she would "consider" advising the Scottish Parliament to try to use its power to prevent Britain from actually leaving the EU. She said Scottish lawmakers might be able to derail the move by withholding "legislative consent" for a British exit, or Brexit.
