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Asian markets higher ahead of Brexit vote

At around 3pm, Singapore time, Singapore's Straits Times Index was up by 1.45% and Hong Kong's Hang Seng Index rose by 1.77%.

Asian markets rebounded on Tuesday from the sharp losses a day ago. An early muted trading on weak China data and a sluggish start to the earnings season on Wall Street subsequently turned better ahead of the Brexit vote. The pound had rallied against the United States (US) dollar to a two-month high after United Kingdom (UK) prime minister Theresa May said the parliament is likely to block Brexit if there is no support given to her existing deal.

At around 3pm, Singapore time, Singapore’s Straits Times Index was up by 1.45% or 46.15 points, at 3,219.61.

Hong Kong’s Hang Seng Index was up 1.77%, or 465.41 points, at 26,763.74, the Shanghai Composite Index gained 1.36% or 34.58 points, at 2,570.34, while the Shenzhen Composite Index was up by 1.49%.

Tokyo’s Nikkei 225 index closed the day’s session 0.96% or 195.59 points higher, at 20,555.29.

Malaysia had opened lower with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down by 1.33 points, at 1,674.83.

Tokyo’s benchmark Nikkei 225 index opened lower on Tuesday by 0.55% or 112.83 points, at 20,246.87, while the broader Topix index had dipped 0.54% or 8.24 points, at 1,521.49 at the open.

Wall Street swung into losses on weak earnings

Indices in the US finished in the red on Monday due to a weak start to the earnings season and plaguing concerns on a global economic slowdown.

The benchmark Dow Jones Industrial Average dipped 0.36% or 86.11 points, at 23,909.84, while the broader S&P 500 fell 0.53% or 13.65 points, at 2,582.61. Tech-rich Nasdaq fell 0.94% or 65.56 points, at 6,905.92 points.

Pound on a 2-month high

The pound rose against the dollar to above the US$1.29 mark for the first time since November before the pivotal vote which is due to be made by Members of Parliament later today.

Although Mrs May’s plan is not expected to receive backing, the extent to how much she loses in the votes could reflect on how much the pound would fall. A smaller loss, for example, could mean that Mrs May could try to renegotiate with the bloc to push for her deal.

Opposition Labour leader Jeremy Corbyn is looking to bank on Mrs May’s defeat and has said that he will call for a vote of no confidence in the government, which could lead to another general election.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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 and quarterly summary.

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