A First Look at BREXIT and Global Equity Markets

Abstract

Global equity markets experienced a significantly negative return of over 4.7 percent on June 24, 2016 in response to news of Britain’s decision (BREXIT) to leave the European Union. Stock market indices for members of the European Union were hard hit with nearly all experiencing significantly negative additional abnormal returns. Large economies such as Germany, Britain and France experienced abnormal returns of -3 to -4.2 percent while the so-called PIIGS: Portugal, Ireland, Italy, Greece, and Spain fared even worse, experiencing abnormal returns of up to negative 10 percent (Greece). We find positive abnormal returns in some BRICS nations.

Keywords: Brexit, Global Stock Returns, Event Study

JEL Classification: F30, G15