Global markets plunge, sterling slides after UK votes to leave the EU

Taro Aso, the Japanese finance minister, said he was 'very concerned about the world economy'

Trading in Nikkei futures was halted briefly as fears of Brexit began to rise overnight (Reuters)

Tremors reverberated through global markets on Friday after the UK's seismic decision to leave the EU.

Sterling plunged to 31-year lows and stocks took a beating as investors raced to take their money out of risk assets and put it in traditional "safe" assets like gold.

The FTSE 100 was expected to open up to 500 points down, marking the fourth biggest drop of all time.

FTSE futures, which give an indication of future moves on the stock market, fell more than 8 per cent. European stocks were set to open up to 7.5 per cent lower.

Mike Van Dulken of Accendo Markets said insurance firms and banks were likely to be hardest hit.

“We expect the hardest hit stocks to be financials - banks, insurance - followed by housebuilders, with commodities related-names - miners, oil - following close behind,” he said.

Some traders were bracing for "extended auctions", when share prices move more than 5 per cent, when the stock market opens at 8am. Others feared UK markets might struggle to open after circuit breakers were triggered by volatile movements in Asian shares overnight.

Trading in Nikkei futures was halted briefly as fears of Brexit began to rise.

At least $700 billion of value was wiped of Asian markets, according to some estimates.

The Japanese Nikkei 225 benchmark index slumped 8 per cent, in the biggest one-day fall since the Fukushima earthquake in March 2011. Taro Aso, the Japanese finance minister, said he was "very concerned about the world economy" as Japanese traders struggled to get a handle on stocks.

The Hong Kong stock market index the Hang Seng was down 5 per cent, with shares in British insurer Prudential, HSBC and Standard Chartered all sliding more that 10 per cent.

Traders flocked to safe haven assets such as gold. The price of gold jumped 8.1 per cent to $1.358 an ounce, its highest since March 2014.

Google reported that the number of online searches for the words "buy gold" climbed by 500 per cent.

"London has not officially opened as yet but we can expect the pound to continue to fall. The BoE will be monitoring the situation closely and has arranged liquidity to support the markets. Be in no doubt though, we are in for a rocky ride," said Trevor Charsley of AFEX, a global payments and risk management company.

The Bank of England released a statement to say that it was monitoring events closely and working with other central banks to ensure the financial stability of the UK.