More than £100 billion has been wiped off London's top flight index after David Cameron announced he would quit as Prime Minister by October following Britain's decision to leave the European Union.
The FTSE 100 Index was down 423.8 points to 5915.7 as the market resembled a sea of red, with banks, housebuilders and travel firms falling sharply.
Away from the top tier, the FTSE 250 was down 8% to 15,828.33.
Sterling sank more than 8% against the US dollar, falling from 1.50 dollars to 1.36.
European markets also plunged as it emerged that Britain had voted to leave the EU, with Germany's Dax and the Cac 40 in France both falling more than 8%.
Dennis de Jong, managing director of UFX.com, said: "This is simply unprecedented. The pound has fallen off a cliff and the FTSE is now following suit. Britain's EU referendum has been a cloud hanging over the global economy for the past few months and that cloud has got very dark this morning.
"The markets despise uncertainty, yet that is exactly what they're faced with this morning. The shockwaves are likely to reverberate for some time and the warning lights are flashing brighter now than ever."
The price of oil also took a tumble, dropping 5.2% or 2.7 dollars to 48.25 US dollars a barrel in the wake of the Brexit decision, with oil majors Royal Dutch Shell and BP falling 89p to 1801p and 17.9p to 368.7p respectively.
However, it was the banks which bore the brunt of the slump, with Barclays down 22% or 41.9p to 145.1p.
Lloyds Banking Group fell just shy of 22% or 15.8p to 56.5p, while HSBC slumped 4% or 18.7p to 435.7p.
Housebuilders were also among the industries taking a hammering, with Barratt Developments down 21% or 121p to 456.5p and Persimmon off 19% or 416p to 1682p.