German stock market sees biggest drop since 2008 crash

News that British voters had opted to leave the EU led to panic in Germany's largest stock index.

German stock market sees biggest drop since 2008 crash
Photo: DPA

It was the biggest shock to the Frankfurt-based DAX – a stock market index consisting of 30 major German companies – since 2008, the year of the global financial crisis.

In recent days markets became convinced Britain would vote to stay in the EU and had rallied as a result.

But after the results were confirmed before the opening of the trading floors, the financial index dropped 10 percent before rising slightly later in the morning, meaning an overall 8 percent drop.

“Everyone was in the wrong place,” one trader said. “Nobody was betting on Britain really leaving. Now there is a huge need to safeguard.”

Since the middle of the previous week the DAX had risen 9 percent on hopes that Britain would stay in the EU.

Banks were particularly hard hit. Deutsche Bank and Commerzbank both lost between 15 and 16 percent of their value. Allianz shares dropped by 13 percent.

But energy companies RWE and Eon which both have large investments in the UK were also affected.

“In the stock market you always need to think the unthinkable,” said market expert Daniel Saurenz, adding that traders had failed to do this in recent days.

German bond prices soar as investors seek Brexit safety

German government bond prices rose sharply on Friday as money poured in from investors seeking safety after Britain voted to leave the European Union.

This pushed the yield on the benchmark ten-year German government bond into negative territory for only the second time in its history, to -0.14 percent.

Yield differentials across the Eurozone, known as spreads, widened, with yields rising in the currency bloc's weaker southern economies.

The Greek government bond yield rose to 9.4 percent early Friday, traders said.

The Leave campaign won the referendum on Thursday with a vote of 52 percent to 48 percent, according to the BBC.

Voter turnout reached 72 percent with over 30 million people casting their ballots.

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Brits in Europe still face complex post-Brexit cases, rights’ group warns

Resources for Brits in Europe to overcome any problems regarding post-Brexit residency issues are being cut just when some people need them most, citizens' rights group British in Europe has warned.

Brits in Europe still face complex post-Brexit cases, rights' group warns

While the implementation of the Brexit agreement on citizens’ rights has gone “relatively smoothly” in some countries, “resources allocated to the rights of UK citizens in the EU are being reduced drastically” at a time of “a rise in serious and complex cases,” warned British in Europe co-founder Jane Golding at a recent meeting of the House of Lord’s European Affairs Committee.

Golding was participating in an evidence session on Tuesday, together with representatives of EU citizens in the UK and Dr Kathryn Chamberlain, CEO of the UK Independent Monitoring Authority overseeing the implementation of EU citizens’ rights under the withdrawal agreement.

The session followed up on an enquiry carried out in 2021 and will set the basis for a “substantial letter” to the UK government.

Golding said that the experience of British citizens varies depending on EU countries.

“Systems for applications for residents have gone relatively smoothly in some countries, for example, France, the Netherlands, Luxembourg, Hungary and Austria.

But in others, they have not,” she said.

Golding cited Sweden as a “big example”, where the rate of refusals is “statistically higher than in other comparable countries, at around 11 to 16 per cent”.

“We have seen cases like a family of four with young children facing an order to leave and the recent well publicised case in the media of a 74 year old lady with Alzheimer’s, living in a care home, who also faced an order to leave”. She added that in Sweden there are more than 900 late residence applications from British citizens under the withdrawal agreement and the current refusal rate is around 60 per cent.

Golding also mentioned problems in Denmark, Portugal and Malta.

As funding for the support network on citizens rights in UK Embassies across the EU was terminated at the end of March 2023 and people rely on volunteer groups for advice, Golding called on the government to maintain support services in place.

She also urged Whitehall to introduce secondary legislation on voting rights so that Britons abroad can have their own representatives in Westminster. The full session can be watched here.