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

AP News
Posted: Jun 28, 2016 11:39 PM
Asian stocks up as worries from Britain's EU leave vote ease

SEOUL, South Korea (AP) — Asian stock markets rallied on Wednesday following 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 1.4 percent to 15,543.72 and South Korea's Kospi gained 1.3 percent to 1,960.40. Hong Kong's Hang Seng index added 0.8 percent to 20,330.22 while Australia's S&P/ASX 200 rose 0.6 percent to 5,136.10. 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 likelihood of a good session this morning, 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 on Friday as the result of the U.K. referendum showed that Britons voted to leave the EU. Global ratings agencies to slash 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 down 0.1 percent to $1.3336.

In other currencies, the yen, which gained sharply following the U.K. referendum, extended its gains. The dollar weakened to 102.345 yen from 102.632 yen. The euro fell 0.1 percent to $1.106.

Investors in the U.S. and Europe appeared to have set aside their anxiety over Britain's vote, partly encouraged by solid data on the U.S. economy and housing market.

On Tuesday, the Dow Jones industrial average gained 269.48 points, or 1.6 percent, to 17,409.72. The Standard & Poor's 500 index rose 35.55 points, or 1.8 percent, to 2,036.09. The Nasdaq composite added 97.42 points, or 2.1 percent, to 4,691.87. In Europe, Britain's FTSE 100 and France's CAC 40 each gained 2.6 percent. Germany's DAX added 1.9 percent.

Benchmark U.S. crude rose 40 cents to $48.25 per barrel in New York. The Contract added $1.52, or 3.3 percent, to close at $47.85 a barrel on Tuesday. Brent crude, used to price international oils, gained 23 cents, at $48.49 a barrel in London.