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Asia builds on global market rally as Brexit shock eases

HONG KONG (AFP) – Asian stock markets climbed again Thursday, tracking another surge in Europe and New York and extending a rebound from last week s hammering fuelled by Britain s shock vote to leave the EU.

The pound also held on to most of its gains versus the dollar as other higher-yielding, riskier, currencies benefited from hope that the fallout from Friday s referendum will not be as bad as feared.

Speculation that authorities will announce monetary easing measures to offset any negative impact have also provided strong support.

Stephen Innes, a senior trader at Oanda Asia Pacific said in a note: “The global central bankers are in the background and the markets realise that the central bankers are going to stand in front of any capitulation.”

Tokyo rose 0.1 percent, although it ended well off its earlier highs owing to profit taking having risen about four percent since Friday s close.

Hong Kong added 1.8 percent and Seoul closed up 0.7 percent. Singapore and Taipei each put on more than one percent, while Manila surged two percent. But Shanghai closed 0.1 percent down.

Sydney climbed 1.7 percent ahead of a neck-and-neck general election in Australia at the weekend.

Asian traders followed strong leads from their counterparts in the US and Europe, where London s FTSE 100 index wiped out all its post-Brexit losses.

In early European trade London eased 0.4 percent, while Paris and Frankfurt each lost 0.7 percent.


Pound stable


“The initial shock over the UK voting out of the EU is easing across the world,” Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co., told Bloomberg News.

“We ve survived the event-related risk, and investors are beginning to see that the impact on the actual economy is limited. There s hope for policy measures globally, not just in Japan, so that s supporting markets.”

Trading floors are rife with talk of fresh stimulus measures from key central banks.

After a $17 billion boost by South Korea, Japan is in focus after the country s prime minister, finance minister and central bank boss held talks Wednesday.

On currency markets the pound edged down slightly from its New York close but managed to hold around $1.3445, well up from the 31-year-low $1.3121 touched Monday.

There were also gains for emerging market and other risk currencies against the US dollar, with South Korea s won up 0.7 percent, India s rupee 0.1 percent higher and the Malaysian ringgit gaining 0.3 percent.

However, there remains plenty of caution as Britain and its EU partners struggle to reach a divorce agreement.

With Prime Minister David Cameron handing over responsibility in the autumn to an as-yet-unknown successor, European leaders are adamant that London will not win any concessions to gain access to the vast single market.

Highlighting the concerns about the impact of the Brexit vote, Singapore s United Overseas Bank said it had suspended loans to anyone wanting to buy property in London, citing “uncertainties”.