Brexit worries send stocks, British pound tumbling again

The price of benchmark North American oil retreated almost five per cent Tuesday, while the loonie dropped by almost a cent and stocks tumbled as investors fretted about the British financial system.

The price for the August contract for light sweet crude was down $2.39 US to settle at $46.60 US per barrel.

After triple-digit losses earlier in the trading session, the S&P/TSX composite index ultimately finished down 39.30 points at 14,219.57. 

On Wall Street, the Dow Jones industrial average shed 108.75 points, closing at 17,840.62, after the July Fourth holiday. The broader S&P 500 closed at 2,088.55, down 14.40 points, while the Nasdaq composite index fell 39.67 points to hit 4,822.90.

The drops came as more concerns emerged about the British economy in the wake of the recent vote to quit the European Union. On Tuesday, a trio of U.K. real estate funds halted trading amid a rush of redemptions.

• 3 British real estate funds move to stem the tide of investors running for the Brexits

In addition, Bank of England governor Mark Carney loosened capital rules to allow banks to lend more to businesses and households.

"There's just so many unanswered questions both from the legal standpoint, a diplomatic standpoint, an economic standpoint," said Tom di Galoma, managing director at Seaport Global Holdings.

On currency markets, the loonie traded lower. The Canadian dollar was down by 0.95 of a cent at 76.83 cents US.

The British pound fell to $1.3029 US from $1.3259 US, hitting its lowest since the Brexit vote and the weakest in 31 years.

Meanwhile, investors sought safety in gold. The price for gold futures for August closed at $1,358.70 US per ounce, up $19.70 on the day.