Asian markets ease after May’s Brexit vote defeat
Hong Kong's Hang Seng Index finished the mid-week trading higher by 0.27%, while the Shanghai Composite Index ended its session flat, and Tokyo’s Nikkei 225 index dipped 0.55%.
Asia markets took a break on Wednesday, as investors assessed and looked for direction after the British Parliament overwhelmingly rejected its Prime Minister (PM) Theresa May’s Brexit deal. Markets also tuckered out from the earlier growth stimulus announcement from China.
Britain’s Members of Parliament voted a 432 to 202 vote to reject Mrs May’s deal on Tuesday, and British newspapers called the outcome ‘a complete humiliation’, ‘no deal, no hope, no clue, no confidence’ and Mrs May ‘the humiliated PM’.
By late afternoon in Singapore, Singapore’s Straits Times Index edged up 0.28% or 9.09 points, at 3,221.39, while FTSE Bursa Malaysia Kuala Lumpur Composite Index eased lower by 0.48% or 8.09 points, at 1,671.33.
Chinese indices also saw muted trading with the Hang Seng Index closing higher by 0.27% or 71.81 points, at 26,902.10, while the Shanghai Composite Index ended the day’s session flat or 0.08 points higher, at 2,570.42. The smaller Shenzhen Composite was little changed, down by 0.12%.
Tokyo’s Nikkei 225 index dipped 0.55% or 112.54 points, to close the mid-week trading at 20,442.75 points, while the broader Topix Index was lower by 0.32% or 4.95 points, at 1,537.77 points.
Brexit vote defeat sheds optimism on Britain not exiting the bloc on a bad deal
The Sterling had rallied to more than a two-month high on Monday night to hit US$1.2912 before United Kingdom’s (UK) Brexit vote was cast. It last traded at US$1.2885, at around 4.00pm, Singapore time.
‘An overwhelming defeat for the UK parliament vote on the Brexit draft deal had been within expectations, yielding little changes for the market,' IG market analyst Pan Jingyi commented.
‘It still looks as if “no deal” is the least-likely option, and on this basis, markets are happy to take a more optimistic view, although anything could still happen,’ cautioned IG market analyst Chris Beauchamp.
‘But if the UK is going to exit it all, it now looks to be on the softest possible terms, something that will please investors and may even make UK assets a lot more attractive … there is a lot of uncertainty to be removed first, and even a delay to Brexit until later in the year does not change this,’ Mr Beauchamp added.
See an opportunity to trade?
Go long or short on more than 15,000 markets with IG Bank.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.