North American stock markets tumble

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TORONTO – North American stock markets have tumbled as the world come to terms with the Brexit vote that puts Britain on a path towards exiting the European Union.

The S&P/TSX composite index was down 155.79 points at 13,975.59 as gains in the gold sector helped limit losses. The Canadian dollar was also down almost a cent to 77.40 cents U.S.

Meanwhile, the British pound plunged to levels not seen since the mid-1980s. The pound fell 13.06 cents or 6.8 per cent to C$1.7809 and lost 12.31 cents U.S. or 8.2 per cent to US$1.3785.

The euro lost ground against the Canadian dollar as it fell 1.75 cents to C$1.4373.

In the U.S., the Dow Jones industrial average fell 381.69 points to 17,629.38, while the S&P500 dropped 48.17 points at 2,065.15. The Nasdaq composite lost 131.14 points at 4,778.90.

In commodities, the August contract for crude oil fell US$2.04 to US$48.07 per barrel, while the August contract natural gas fell three cents to US$2.707 per mmBtu.

Gold was the lone bright spot as the August contract gained US$56.80 at US$1,319.90 per ounce.

In a statement, G7 finance ministers and central bank governors said they have taken steps to ensure adequate liquidity and to support the functioning of markets.

“We affirm our assessment that the UK economy and financial sector remain resilient and are confident that the UK authorities are well-positioned to address the consequences of the referendum outcome,” the group said.

A CIBC commentary predicted central banks will now move to “damage control mode.”

It said the Bank of England could cut its key interest rate as early as Sunday and “we might also see co-ordinated actions with other central banks to smooth currency movement.”

A Scotiabank foreign-exchange commentary said there had been reports that central banks in Switzerland and Denmark had directly intervened to dampen currency fluctuations.