REACTION OF GLOBAL STOCK MARKETS TO BREXIT

Abstract

This study investigates the impact of anticipated Brexit announcement on short-term market response of major global stock markets. The results indicate that political news (Brexit) creates uncertainties in the global stock markets. We found that global stock markets generally responded negatively to the Brexit announcement on the first trading day and the day after the event except in China. We also found that announcements of opinion polls released immediately before the referendum did not have any significant effect on global stock market movements, raising questions about the quality of information contained in opinion polls.