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Asian stocks up as worries from Britain’s EU leave vote ease

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Asian stock markets rallied Wednesday after overnight gains on Wall Street and even bigger gains in Europe, as worries about uncertainty following Britain’s EU referendum eased.

Japan’s Nikkei 225 jumped 1.6 per cent to 15,566.83 and South Korea’s Kospi gained 1 per cent to 1,956.36. Hong Kong’s Hang Seng index added 1 per cent to 20,364.99 while Australia’s S&P/ASX 200 rose 0.8 per cent to 5,142.40. Stocks in mainland China, Taiwan, Singapore and Indonesia were also higher.

Analysts said market volatility can come back anytime and it was too early to say investor appetite for risks have made a full comeback.

Despite the stock markets’ solid performance, “it’s likely that markets will leave a Brexit risk factor in pricing for a while yet,” Ric Spooner, chief market analyst at CMC Markets, said in a commentary.

“Stock markets may find it difficult to return immediately to the levels seen before last week’s vote with buyers being wary about being too aggressive in what may yet be just another volatile swing.”

Global financial markets were rattled last Friday as the result of the U.K. referendum showed that Britons voted to leave the EU. Global ratings agencies slashed their top-shelf credit rating for the U.K. The pound plunged to the lowest level in 31 years.

The British currency recovered some of its losses this week but remained near the 31-year-low level. On Wednesday, the pound edged up 0.1 per cent to $1.3371 (£1.00).

In other currencies, the yen, which gained sharply following the U.K. referendum, extended its gains. The dollar weakened to 102.296 yen from 102.632 yen. The euro was nearly flat at $1.107.

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Paul

The author Paul