Brexit slams global markets as bond yields tumble

SEOUL, South Korea - Global stocks fell Wednesday, while the British pound hit a new 31-year low, as worries reawakened about the economic repercussions of Britain's decision to leave the European Union. The 10-year U.S. Treasury yield hit a record low as investors sought out the safety of bonds.

At around 8 a.m. Eastern, Britain's FTSE 100 fell 1.6 percent to 6,440, while France's CAC 40 dropped 2 percent to 4,079. Germany's DAX lost 1.9 percent to 9,353.

Futures augured a weak start for Wall Street. The Dow Jones industrials and S&P 500 futures both slid 0.6 percent, following Tuesday's reversal for stocks on renewed Brexit impact fears.

Concerns have grown over the potential economic costs of the U.K.'s decision to leave the EU. Investors this week rushed to sell out of funds that own British commercial real estate, which had been inflated by foreign money in recent years. Mark Carney, the Bank of England governor, said that some of the risks to the economy predicted before the referendum had begun to crystalize.

"Carney, almost the only British leader who seems to not be resigning at the moment, emphasized the challenges the U.K. economy will suffer in the post-Brexit world," said Angus Nicholson, a market analyst at IG in Melbourne, Australia. "Carney's speech seems to have initiated the dawning of realization of the longer-term impact of Brexit for many in the markets."

The pound traded below the $1.30 level for the first time in more than three decades. It was trading at $1.2972, down 0.4 percent on the day. The dollar weakened to 100.61 yen from 101.28 yen, while the euro slipped to $1.1066.

The 10-year yield on the U.S. Treasury note touched 1.33 percent on Wednesday, below its previous record set in 2012. Many other countries' government bond yields were also at record lows, with those of Germany and Japan below zero.

Historically, when concerns flare up about the economic outlook, investors buy bonds, which sends their yields down.

Tokyo's Nikkei 225 finished at 15,379, down 1.9 percent after sliding as much as 3 percent. South Korea's Kospi lost 1.9 percent to 1,953. Hong Kong's Hang Seng index slid 1.2 percent to 20,495. Australia's S&P/ASX 200 was down 0.6 percent to 5,198. Stocks in mainland China and Thailand closed higher while the key index in Taiwan fell.

Benchmark U.S. crude lost 52 cents at $46.08 per barrel in New York. The contract sank $2.39 on Tuesday. Brent crude, used to price international oil, fell 60 cents to $47.37 a barrel in London.