Investors are bracing for more fall-out as trading resumes tomorrow after Britain's shock vote to leave the European Union sparked market chaos on Friday, evoking memories of the 1987 crash and Global Financial Crisis.

"I don't think it's going to be just one bad day and we move on," said JBWere investment strategist Bernard Doyle.

He said markets would remain volatile until there was more clarity around how the so-called Brexit process would play out.

"I would say this is going to be an at least four-to-six week period of markets trading nervously and finding lower levels."


Much uncertainty remains around Britain's political leadership, with Prime Minister David Cameron announcing on Friday that he will step down by October.

Meanwhile, Spanish voters were heading to the polls last night (NZ time) to vote in a general election.

Doyle said that when markets were trading on high valuations, like the S&P/NZX 50 is at present, the potential for them to experience dramatic sell-offs increased.

"As we saw in January and February, when valuations are high, shares can price lower very quickly."

However, he said the New Zealand market tended to be more insulated from global volatility than many of its larger counterparts overseas.

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

The surprise result sent the British pound plunging to a 31-year low against the US dollar, while US$2 trillion was wiped off the value of global sharemarkets.

London's FTSE 100 index fell more than 8 per cent at the open on Friday 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.

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

The big British bank stocks took an epic battering, with Lloyds, Barclays and RBS dropping as much as 30 per cent, although they reclaimed nearly half those losses later in the day.

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

Japan's Nikkei slumped almost 8 per cent, while France's Cac 40 fell 8 per cent and Germany's DAX plunged 6.8 per cent.

Across the Atlantic, Wall Street had its biggest sell-off in 10 months, with the S&P 500 dropping 3.6 per cent and the Nasdaq losing 4.1 per cent.

Craigs Investment Partners head of private wealth research Mark Lister said British shares didn't trade nearly as badly as they could have done on Friday.

"Surprisingly [the FTSE 100] actually posted a gain of 2 per cent for the week, and closed 4 per cent higher than where it fell to the previous week," he said.

Markets are now anticipating less chance of another near-term hike in interest rates by the US Federal Reserve.

"That's a positive in that it keeps markets supported but it's a negative in the sense that reasons for [not hiking] are negative," Lister said.

"I think we'd all like markets and the world economy to get back to normal."