Asia-Pacific regions and non-European emerging markets have definitely come out the best after the sell-off. The rally in the Singaporean SGX is particularly interesting given that some of its gains may partly be driven by speculation that financial services firms may look to relocate some of their London positions to other cities. Brazil was impressively unfazed by the Brexit sell-off and seems solidly driven by its domestic issues. Taiwan also rebounded to within touching distance of its 2016 highs.
Greece, Italy and Spain have struggled to recover much of their post-Brexit sell-off. Brexit has really cast doubts over whether the EU and the eurozone will ultimately be able to survive in the long-term. The key losers in an EU break up scenario would be the so-called PIGS - Portugal, Italy, Greece, and Spain, and it’s not surprising that in the wake of Brexit their equity markets have seen the least love in the rebound rally.
In an attempt to shore up some of these concerns, Italy was granted permission by the European Commission on Sunday to provide €150 billion of liquidity support to its banks until the end of the year. But the Italian government is also keen to directly inject €40 billion into its banks given that almost 18% of their loan book is non-performing.