What is Brexit?

As recd.
What is Brexit?

Brexit word is derived from “Britain” and “exit“. In 1975 there was a voting in Britain (United Kingdom) to enter the European Union or not. 67% of people voted “Yes”, means they wanted to join the European Union. After that we all know that Britain has gone through a lot of development and changes. So a lot of political parties and people there want to leave the European Union.

Why?

Because Britain has to pay £350 million – that is about $440 million – per week to the European Union. A lot of money about 50% of it comes back in the form of aid, but the problem is European Union decides where that money needs to be spend in UK. People are not happy with this as they think their government can use this money for better purposes like education and health care.

What about Big Business Owners?

Strangely most big business owners are in favor of Britain staying in the EU. Why? Because it makes it easier for them to move money, people and products around the world especially the European Union which consists of very wealthy and highly educated youth who can be recruited for job from 28 member countries. If Britain exits the EU then the government may change the rules of recruiting people from other European countries and giving preferences to people of their own country so this can create a huge problem as far as human resource is concerned.

When will the voting be held and results declared?

A referendum is being held on Thursday, 23 June 2016, to decide whether Britain should leave or remain in the European Union. Anyone who is above 18 is eligible to vote. Whichever side gets more than 50% of votes, that side will be declared the winner and the British government will go that way.

The final results can be known at around 4 am Britain time. Which means 4+4.3 = 8.30 am India time on Friday, 24 June 2016 – just before our market opens for trading.

What will happen to NIFTY?
It’s obvious whatever has to happen it will already happen before the markets open for trading. Soeither Nifty will open Gap down or up.

If the results are “Yes” – it means Britain will leave the European Union and it will be a big jolt to the markets around the world. Not a good news – Gap Down Opening.

If the results are “No” – it means Britain will stay with the European Union and it will be a big thumbs up to the markets around the world. A very good news – Gap Up Opening – though not very high opening since technically only fear will go everything else remains same.

If UK exits from European Union, there would be Financial crisis in the economy. FII will withdraw money from there. FII cannot keep there funds ideal. As whole global market would be affected by Brexit, at such time Commodity is safety plaxe to invest money. Secondly, Dollar will be at boom. So all the commodities traded which are denominated and traded majorly in dollar where price will automatically increase.