Bracing for Brexit? You have 24 hours to create safeguards for the two outcomes

NEW DELHI: What will be the fallout of Thursday’s Brexit referendum on the financial markets and how are markets likely to react on Friday morning?

These are questions on every investor’s mind a day ahead of the historic event. As Britons go off to vote tomorrow, investors will hold their breath till the final outcome, which is expected only on Friday morning.

Prior to the suspension of opinion polls, the ‘Bremain’ or ‘Remain’ camp had a slight edge over the Brexit or ‘Leave’ camp, but the race is expected to be tight.

So, how would you position yourself for Friday’s big verdict? We spoke to market veterans on Dalal Street and tried to understand the fallout for the financial markets in both scenarios.

Also read: This is how 'Brexit' is going to hit our stocks, rupee and the economy

Scenario 1: Brexit and bloodbath



Should the British decide to leave the European Union once and for all, ending a 43-year old marriage, the pound will take a plunge of as much as 20 per cent, according to George Soros, the man who broke the Bank of England,. The rupee will tumble, too, as it will make the dollar surge.
The equity market will see a free fall as concerns over global recession and a breakup of the EU will haunt investors, while gold will rally towards multi-year highs, consolidating its new bull market.

Scenario 2: Bremain and bonanza



This is the rosier of the two scenarios. If the Brits keep their wits and choose not to say ‘Au Revoir’ to the EU, that would cause the pound to surge, which may cause the rupee also to surge, albeit for short period.

The stock market would not be able to contain itself as the bulls will get set on a lung-busting run.

In such a case, gold may see a sharp cut and take a dive towards the $1,200 mark.

Keep your fingers crossed, people!