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Fears of a hard Brexit by Theresa May push most Asian stock markets lower

Most Asian stock market indices were trading lower on Monday (16 January) with the Shanghai Composite down 0.98% at 3,082.23 as of 5.49am GMT, following a drop in the sterling to a three-month low.

As of 12:47am EST, the pound was trading 1.2% lower at 1.2036 to the US dollar, ahead of Prime Minister Theresa May’s speech scheduled on Tuesday. It is feared that she would signal that the UK was prepared to make a clean and hard exit from the European Union (EU).

“The market is now positioning for some fairly punchy rhetoric from Theresa May and this idea of “hard Brexit” and a clean break from the single market seems increasingly likely, with the government making a bid to gain full control over immigration,” Chris Weston, chief market strategist at spreadbettor IG, was quoted as saying by CNBC.

The bearish trend also comes ahead of Donald Trump’s inauguration as US president on 20 January. Analysts said the market will need to get more clarity on his policies before it can move forward.

“The market is showing greater reluctance to push on with reflation-type trades without more details of proposed fiscal spending plans and the economic data to back it up…It looks as though more than just reasonable data will be needed to see yields and the dollar push higher again. Some decent positive surprises may be necessary for the market to gain conviction,” analysts at ANZ were quoted as saying by Reuters.

Indices in the region were trading as follows at 6.06am GMT:

Country Index Price Up/Down %Change
Hong Kong Hang Seng Index 22,705.30 Down 1.01%
Japan Nikkei 225 19,124.77 Down 0.84%
South Korea KOSPI 2,065.55 Down 0.54%
India BSE 27,268.76 Up 0.11%
Australia S&P/ASX 200 5,748.40 Up 0.48%

On 13 January, the FTSE 100 Index closed 0.62% higher at 7,337.81, while the S&P 500 index closed 0.18% higher at 2,274.64.

Among commodities, oil prices which lost around 3% last week were trading higher. As of 12.59am EST, WTI crude oil was trading 0.19% higher at $52.47 (£43.61) a barrel, while Brent crude was trading 0.25% higher at $55.59 a barrel.

Source

http://ibtimes.co.uk/most-asian-markets-decline-pound-slides-three-month-low-amid-fears-hard-brexit-1601222