The Australian share market lost $30 billion yesterday amid fears Britain will exit the European Union.
Investors are clearly worried the British vote next week on EU membership is starting to lean towards exit.
Economists say if the UK does leave the European Union, it could lead to a huge sharemarket sell-off around the world and a sharp fall for the British pound.
Predictably, spooked investors went running for gold, sending its price above US$1280 an ounce.
In Australia, the stock market benchmark S&P/ASX200 fell 2.1 per cent to a seven-week low of 5203.3 and the All Ordinaries lost 2 per cent to 5282.5
Aurora Funds Management senior portfolio manager Hugh Dive shared his thoughts on the share market sell-off with The Age.
“The market is dreadful today,” he said.
“It’s about Brexit. The companies with British pounds exposure, like Henderson Group, are not doing well.”
“However, there could be a bounce in these stocks and a buying opportunity if you believe the British bookmakers, who seem to be calling a stay vote.”
“Energy stocks are also faring badly after the drop in oil.”
The banks copped a fair hit, with all four majors experiencing a drop in share price between 2.3 and 2.6 per cent.