ZCZC
BCN-30
ASIA-MARKETS-UPDATE
Asian markets sink but pound edges up ahead of new Brexit vote
HONG KONG, March 13, 2019 (BSS/AFP) – Asian markets retreated Wednesday
after two days of gains but the pound enjoyed a slight uptick after the
previous day’s sharp losses as British officials looked to ease concerns
about the possible impact of a no-deal Brexit.
The sterling saw wild fluctuations Tuesday as it hit a near two-year high
on news Prime Minister Theresa May had won a last-minute revision to her
agreement with the European Union.
But it then tanked to a three-week low as it was tossed out by MPs at
Westminster later in the day.
The decision means lawmakers will vote Wednesday on whether to leave the
EU on March 29 without an economic agreement — which is expected to fail —
then Thursday on whether to extend the deadline.
In a bid to ease concerns about the financial impact on the economy if MPs
vote later in the day to leave with no agreement, officials in London said
they will slash tariffs on 87 percent of imports, and will not apply customs
checks on the border with Ireland.
However, there remains a lot of uncertainty, with some observers
suggesting the latest developments put the country a step closer to another
referendum, while others say it could make a divorce without an agreement
more likely.
“My tuppence is that parliament has, in their own mind, seized control of
the Brexit process and will duly ask and likely get an extension to the 29
March exit date,” said OANDA senior market analyst Jeffrey Halley.
“The breathing space granted will be used by whomever to renegotiate a
more palatable Brexit deal for the UK. Except nobody has asked the Europeans
yet. A short-term gain may yet belie long-term pain.”
– Slope or cliff? –
And Michael Hewson, chief market analyst at CMC Markets in Britain, warned
there was no guarantee a delay would automatically be allowed.
“Voting against a no-deal Brexit doesn’t of itself remove the option of no
deal, as this is already currently written in statute, and the EU could well
decide to play hardball and take the view that the only options available are
the current deal, or to revoke article 50,” he said in a note.
MORE/HR/1448
ZCZC
BCN-31
ASIA-MARKETS-UPDATE 2 LAST HONG KONG
The news from London added to selling pressure on Asian equity markets,
which had enjoyed a bounce Monday and Tuesday from last week’s battering,
with investors still on edge over the state of the global economy.
Tokyo ended one percent lower, while Shanghai fell 1.1 percent and Hong
Kong lost 0.4 percent.
Seoul shed 0.4 percent, Sydney gave up 0.2 percent and Singapore was off
0.8 percent. Wellington and Manila also retreated, though Taipei, Mumbai and
Jakarta were slightly higher.
With very little news coming out of Beijing and Washington regarding the
trade talks, investors are moving to the sidelines until there is something
concrete to buy on.
“Until the world’s two largest economies conclude an agreement… it will
be difficult to gauge a clearer picture of the global economy in 2019,” added
Halley.
“The outcome of the trade talks — and perhaps the US-eurozone will likely
follow — will dictate whether we will gently roll down the slope or off the
edge of the cliff.”
In early trade, London fell 0.1 percent, Paris edged up 0.1 percent and
Frankfurt fell 0.2 percent.
– Key figures around 0820 GMT –
Pound/dollar: UP at $1.3134 from $1.3062 at 2100 GMT
Euro/pound: DOWN at 86.04 pence from 86.46 pence
Tokyo – Nikkei 225: DOWN 1.0 percent at 21,290.24 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 28,807.45 (close)
Shanghai – Composite: DOWN 1.1 percent at 3,026.95 (close)
London – FTSE 100: DOWN0.1 percent at 7,144.28
Euro/dollar: DOWN at $1.1286 from $1.1292
Dollar/yen: UP at 111.30 yen from 111.29 yen
Oil – West Texas Intermediate: UP 33 cents at $57.20 per barrel
Oil – Brent Crude: UP 23 cents at $66.90 per barrel
New York – DOW: DOWN 0.4 percent at 25,554.66 (close)
BSS/AFP/HR/1450