LONDON: British markets plunged on Friday, with sterling hitting a 31-year low in its biggest fall on record and UK stock futures pointing to a steep fall at the market open after Britons voted to leave the European Union.

Bonds also sold off sharply, pushing UK government borrowing costs sharply higher, as traders and investors grappled with the market implications of 'Brexit'.

The pound had hit a 2016 high above $1.50 after an earlier opinion poll showed an outcome in favour of 'Remain', but fell nearly 17 cents from that peak as area counts came in and TV stations said the Brexit camp had won the landmark referendum.

The British currency's fall of almost 10 per cent was also historic, marking a decline greater than anything seen since free-floating system of exchange rates was introduced in the early 1970s.

It was even bigger than on 'Black Wednesday' in 1992, when billionaire financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism.

London bankers working through the night said they hadn't seen anything like the volatility sweeping across UK assets.

“It's back to the future, we're back to where we were in 1985,” said Nick Parsons, co-head of global currency strategy at NAB.

“We've had a 10 per cent decline in six hours. That's simply extraordinary, and a vote to leave provides an existential crisis for Europe,” he said.

Sterling fell as low as $1.3305, its weakest level against the dollar since September 1985. It fell 6pc against the euro and 15pc against the yen .

The cost of insuring against swings in the sterling/dollar exchange rate jumped to 53.375pc, the highest since at least 1998, and stock futures pointed to a fall of 7pc at the London open.

Banks are likely to be in the spotlight after the Hong Kong listings of HSBC and Standard Chartered plunged as much as 10pc in Asian hours.

Bond trading platform Tradeweb opened earlier than usual on Friday, and initial data showed a jump in benchmark 10-year UK government bond yields to 1.57pc from around 1.38pc late Thursday.

“It's extraordinary. 'Shock' probably isn't too strong a word,” said John Wraith, Head of UK Rates Strategy, UBS Investment Bank.

Impact on global markets

The referendum's market impact was global.

Pakistan's KSE-100 index fell 2 per cent in early trading on Friday, hurt by a global sell-off in risk assets after Britain voted to leave the European Union.

At 10:17am, the KSE-100 index of the Pakistan Stock Exchange traded 1.96pc lower at 37,484.18 points.

"It's due to Brexit. It's the volatility in global markets," said Saad Hashmey, chief economist and director of research for Topline Securities

The plunge also affected exchange rates between the rupee and sterling, with the former gaining Rs13 against the pound on Friday. The euro dropped just slightly, while the dollar remained constant.

US Treasury yields fell sharply as investors rushed to the safety of US government debt, while other safe-haven assets like gold and the Japanese yen jumped.

All the major international and British banks in London, including Citi Deutsche Bank, JPMorgan, Goldman Sachs and Barclays had traders either working through the night or on call.

On Citi's foreign exchange desk in London, dealers were only accepting voice orders and only desk heads had the authority to approve trades, according to a source at the bank.

Banks had warned clients about volatile trading conditions around the results which may lead to large gaps in prices.

Barclays stopped accepting new “stop loss” orders as of 0600 GMT, an extremely rare move for one of the big six banks that dominate the world's biggest financial market.

Investors are now bracing themselves for possible intervention from central banks or finance ministries to stabalise markets.

So far, there has been nothing concrete, market sources said.

The referendum on whether to quit the EU was bitterly contested, and polarised the nation.

Financial markets, on edge for weeks over the uncertain outcome, had rallied on the strength of late polls that showed a swing towards staying in, perhaps setting them up for the steep fall.

“Those big money bets in the lead-up to yesterday's vote look to have been rather premature,” said Michael Hewson, chief market strategist at CMC Markets.

The Bank of Japan said it was ready to work with other central banks to pump cash into financial markets to combat wild swings, while the Bank of England said it would take “all necessary steps” to avert a full-blown crisis.

Earlier Japan's Finance Minister Taro Aso vowed a “firm response” to volatility if necessary.

'Independence Day'

A flight to safety also saw higher-yielding and emerging market currencies slump, with the Australian dollar down 3.4 percent, South Korea's won diving 2.4 percent and the Indonesian rupiah shedding 1.7 percent.

Malaysia's ringgit was down 2.7 percent, one of its worst days since 1998. There were also heavy losses for India's rupee, the Canadian dollar and the Singapore dollar.

Gold, another safe investment asset, surged six percent to sit at a two-year high.

As the shock results rolled in, equity markets went into meltdown, wiping hundreds of billions of dollars off shares.

Tokyo plunged nearly eight percent, Sydney shed 3.2 percent and Seoul was 3.1 percent off. Mumbai lost 3.8 percent and Shanghai sank 1.3 percent, while Taipei, Wellington, Manila and Jakarta all saw sharp losses.

Hong Kong tumbled 4.4 percent — having lost more than five percent at one point — in the afternoon with British banking giants HSBC and Standard Chartered both losing about 9pc.

In Pakistan, which relies on exports from the Britain, the stock exchanged dived more than 2pc.

In early European trade London dived eight percent, with banking shares losing 30pc. Frankfurt plunged 10 percent and Paris lost eight percent.

And the yields on German bonds, considered ultra-safe, turned into negative territory, while British bond yields also tumbled.

“It's scary, and I've never seen anything like it,” James Butterfill, head of research and investments at ETF Securities, said in London. “A lot of people were caught out, and many investors will lose a lot of money,” he told Bloomberg News.

Before the result was called, in the early hours in Britain Nigel Farage, leader of the anti-Europe UK Independence Party, declared victory, saying it was the country's “independence day”.

The prospect of a severe hit to the global economy also hammered oil prices, with both main contracts slumping more than 6pc.

“We are seeing oil swept up in the general market nervousness to the vote,” said Ric Spooner, a chief analyst at CMC Markets in Sydney.