Cameron to resign, British vote to leave EU, pound hits 31-year low

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LONDON/SEOUL, South Korea (AP) — Prime Minister David Cameron says he will resign by the fall and insists the British people's will must be respected after voters chose to leave the 28-nation European Union. 

Cameron says there can be no doubt about the result of Thursday's historic vote but that he is not the "captain" that will steer the ship through difficult negotiations with the EU.

He says he will resign by the time of the Conservative party conference in the fall.

World financial markets were rocked in the immediate aftermath on Friday by Britain's unprecedented vote. Stock markets and oil prices crashed and the pound hit a 31-year low.

The uncharted, unexpected path of a European Union without Britain sparked the sell-offs, with more jitters expected as global markets try to digest the shock result.

Governments in Asia vowed to take measures to stabilize the financial markets as panic gripped investors.

Tokyo stocks plummeted about 8 percent, their biggest fall since 2008. Other Asian markets were set to finish the day with big losses.

Shocked investors were ready to dump British stocks as soon as the market opens at 0700 GMT, with futures for the benchmark stock index FTSE 100 tanking 8.3 percent, and the pound, which trades 24 hours, already falling at one point to its lowest level since 1985.

"You can see people are running for cover," said Ken Courtis, chairman of Starfort Investment Holdings in Tokyo. Investors were betting on a victory for the remain side, but "what you're seeing now in markets is an adjustment in the other direction, as everyone tries to get through a tiny door at the same time," he said.

The British currency managed to recover and narrow its fall by mid-afternoon in Asia, after diving as much as 8 percent to the lowest level in 31 years. The pound traded 5.7 percent lower against the dollar at $1.3701. It was down 4 percent against the euro, at 1.2355 euros.

Britain's decision to leave the EU launches what will be years of negotiations over trade, business and political links with the EU, which will shrink to a 27-nation bloc.

Crude oil prices and U.S. futures also took a big hit. The yen surged as much as 4 percent to the U.S. dollar as investors seeking safety snapped up the Japanese currency.

"The currency markets are particularly making nervous fluctuations and we will watch their activity very closely so that the ongoing movement will not continue, and I hope to see firm intervention whenever necessary," Taro Aso, Japan's finance minister, told reporters.

Other policymakers in Asia also expressed concerns and vowed to take measures to restore stability in the markets. South Korea's finance ministry said it will take "every available measure" to stabilize currency and financial markets.

Japan's Nikkei 225 finished the wild day at 14,952.02 down 7.9 percent while South Korea's Kospi sank 3.1 percent to 1,925.24. Hong Kong's Hang Seng index tumbled 4.4 percent to 19,949.83 and Australia's S&P/ASX 200 fell 3.2 percent to 5,113.20. Stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.

U.S. futures took a dive. Dow futures fell about 4 percent and S&P futures nosedived nearly 5 percent.

"Financial markets throughout the night have been chaotic to say the least," said Craig Erlam, senior market analyst at Oanda in London. "All eyes will now be on central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan."

On Thursday, Wall Street finished with rallies as pre-poll forecasts showed that Britain would keep the EU membership. Asian stock markets opened the day higher but the mood turned sour as results started to show that the "leave" vote would win. As the results increasingly pointed to the EU exit, investors dumped stocks and other risky assets.

In other currencies, the dollar fell to 102.75 yen from 104.80 yen while the euro weakened to $1.105 from $1.132.

Benchmark U.S. crude plunged 5.3 percent, or $2.62, to $47.49 per barrel in New York. Brent Crude, the benchmark for international oil price, fell 3.8 percent, or $1.99, to $48.90 per barrel in London.


AP business writer Kelvin Chan contributed to this report from Hong Kong.

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