Roughly US$2 trillion was wiped off global stocks after Britain's shock vote to leave the European Union sparked carnage in sharemarkets from New Zealand to London.

In case you're having trouble getting your head around that - two trillion is two thousand billion. And remember, one billion is one thousand million.

Wall Street had its biggest sell-off in 10-months overnight, with the S&P 500 share index dropping 3.6 per cent and the Nasdaq plunging 4.1 per cent.

That followed a torrid day's trading in Europe which saw London's FTSE 100 plunge more than 8 per cent at the open before recovering, to close down 3.2 per cent, after Bank of England governor Mark Carney pledged to do whatever it takes to support the markets.


Britain's 52 per cent vote to leave EU after 43 years in the union was not anticipated by markets, which rallied ahead referendum on expectations of a "remain" outcome.

The surprise result sent markets into a state of flux, prompting concerns about the outlook for the world economy.

Britain's pound plunged to its lowest level against the greenback since 1985 yesterday before making a slight recovery.

The big British bank stocks took a US$100 billion battering, with Lloyds, Barclays and RBS plunging as much as 30 per cent, although they cut those losses nearly in half later in the day.

Investors sold riskier assets such as shares while seeking refuge in the US dollar and other safe havens such as gold and US Treasury bonds.

Investors rushed into low-risk sovereign bonds, with US 10-year notes up around 1.5 points.

Oil slumped by around 5 per cent.

"After the initial shock of Brexit, investors are thinking about what a protracted divorce really means for markets," said Shane Solly, a portfolio manager with Harbour Asset Management in Auckland.


He said Britain exiting the EU would mean big changes for European economics, particularly if it prompted other countries to leave the union.

"Ultimately it means global growth remains slow and interest rates [remain] low," Solly said.

Asian and Australasian markets were heavily sold-off yesterday as the Brexit votes were counted.

The S&P/NZX 50 closed down 2.3 per cent while Australia's S&P/ASX 200 fell 3.2 per cent.

Japan's Nikkei slumped almost 8 per cent.

Grant Williamson, of Christchurch sharebrokers Hamilton Hindin Greene, said that while the outlook for the global environement was highly volatile, the New Zealand sharemarket's fundamentals remained solid.

"It's a little bit unknown just what effect this will have on the New Zealand market," Williamson said.

"There's a lot of uncertainty as to whether this will play out into further issues with the EU and it will be interesting to see how the EU is going to treat Britain here on in. There's just so much uncertainty, which obviously markets do not like."

The Brexit vote prompted big gains in the New Zealand dollar versus the severely battered British pound, with the kiwi trading at 52p this morning up from 48.5p yesterday.

The New Zealand dollar is trading at US70.8c against its US counterpart, down from US73c yesterday.

In addition to the Bank of England, the European Central Bank and the People's Bank of China also said they were ready to provide liquidity if needed to ensure global market stability.

Jeff Kravetz, a strategist at the Private Client Reserve at US Bank, said markets had been caught off guard.

"In the end, when markets start to settle down, I think they are going to realise that this is not the end of the world," he said.

In the US, investors were pricing in less chance of another hike in US interest rates given the Federal Reserve had cited a Brexit as one reason to be cautious on tightening.

Doug Cote, chief market strategist at Voya Investment Management in New York, said that dynamic was a positive one for markets.

"If you have cash on the sidelines it could be a buying opportunity, but I wouldn't be changing [bonds-stocks] allocations right now," he said.

- addtional reporting from agencies.