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After a harrowing day of political uncertainty in the United Kingdom only to end with the UK Prime Minister surviving the no confidence vote, Asian markets opened higher on Thursday on pause from the Brexit turmoil.
Updates from United States (US) President Donald Trump earlier in the week saying that the US and China are progressing on their trade discussions also provided some relief to investors.
Tokyo stocks opened higher on Thursday, with the benchmark Nikkei 225 index up 0.65% or 140.96 points to 21,743.71 in early trade. The broader Topix index was up 0.44% or 7.04 points at 1,613.65.
Singapore shares opened higher, with Singapore’s Straits Times Index up 11.08 points or 0.40% to 3,111.07 points minutes into trading.
Chinese stocks rose at 10.00am, Hong Kong time, with the Shanghai Composite Index up 0.02% or 0.59 points higher at 2,602.75, while the Hang Seng Index was up 0.69% or 181.77 points at 26,368.48. China’s smaller Shenzhen Composite Index rose 0.24%.
UK Prime Minister survives vote to oust her
British Prime Minister Theresa May survived a no-confidence vote on her leadership, with 200 out of 317 Tory Members of Parliament voting for her to remain as their leader.
The Sterling rallied from its 20-month low after the vote, clawing back gains early morning in Asia, at US$1.2629.
But the respite seen from the Sterling is not expected to sustain, as the European Union (EU) divorce agreement with Brexit is not anywhere near the finish line.
Analysts remain unoptimistic as the Brexit issue remains unsolved, and the divorce deal outlook does not look promising.
“Now that the vote is out of the way, we can go back to where we were 24 hours ago, and this is no comfort for investors. There is a deal ready to go, but it is still not going to pass Parliament,” said IG Market Analyst Chris Beauchamp.
“While the Prime Minister cannot be challenged for another year by her own party, she will not be able to get the deal through unless the EU grants some concessions…The UK’s future, with the clock ticking down, is still very uncertain,” Mr Beauchamp said.
Markets calmer from updates on US-China trade war
Meanwhile, optimism on the Sino-US trade grew after Mr Trump said trade talks with China were progressing and discussions were underway.
Chinese state-owned companies have bought more than 1.5 million tonnes of US soybeans, a Reuters report said on Wednesday, in the first major US soybean purchase in more than six months.
As part of the trade truce talks between both countries, Mr Trump had agreed to put a hold on new tariffs while China President Xi Jinping said the country would ramp up on purchases of American products.