World Economy

Global Markets Start to Shake Off Brexit Woes

Global Markets Start to Shake Off Brexit Woes Global Markets Start to Shake Off Brexit Woes

The pound, European stocks and commodities were all headed for their first gains since Britain’s shock vote to leave the European Union, while Asian shares erased losses amid signs policy makers are taking steps to limit any economic fallout.

Sterling and the Stoxx Europe 600 Index both rebounded after tumbling 11% in the last two trading sessions. A gauge of the greenback’s strength snapped its steepest rally since 2011. The Bloomberg Commodity Index climbed from a three-week low as oil rose to about $47 a barrel and industrial metals rose. Sovereign bond yields plumbed new lows in Australia, Japan and South Korea as futures indicated that the next move in US interest rates is now likely to be a cut.

The Stoxx Europe 600 Index jumped 2.3% and the UK’s FTSE 100 Index surged 2.1%. S&P 500 futures rallied 1%.

The MSCI Asia Pacific Index was little changed, after earlier sliding as much as 1.2%. A $17 billion fiscal stimulus package boosted shares in South Korea, while shares in Japan were buoyed by a Nikkei newspaper report saying a 20 trillion yen ($196 billion) stimulus proposal has been submitted to Prime Minister Shinzo Abe by a senior official in his party.

The pound strengthened 0.4% versus the dollar in London, supported by technical indicators that suggested the record two-day loss since Thursday’s vote was excessive.

The yen weakened 0.1%, after surging more than 4% over the last two sessions. The Bloomberg Dollar Spot Index retreated 0.4%, following a two-day jump of 2.7%.

  Asian Stocks Regain

Most Asian stock benchmarks rebounded from early losses Tuesday as investors started shaking off the jitters from Britain’s vote to quit the European Union and its messy aftermath, AP reported.

Asian markets were broadly lower in early trading but reversed some of their losses later on optimism for more government support policies.

Japan’s Prime Minister Shinzo Abe instructed officials to take steps to reassure markets, the Kyodo news agency reported, while South Korea’s government unveiled a 20 trillion won ($17 billion) stimulus package and backup budget for big infrastructure projects.

Japan’s benchmark Nikkei 225 index climbed 0.6% to 15,399.79 while South Korea’s Kospi added 0.4% to 1,934.23. The Shanghai Composite Index in mainland China edged up 0.1% to 2,898.35 and Australia’s S&P/ASX 200 fell 0.5% to 5,113.20. Benchmarks in Taiwan, Singapore, Thailand and Indonesia also rose.

Hong Kong’s Hang Seng Index fell 0.8% to 20,077.75, dragged down by companies with high exposure to Britain’s economy. One of the index’s biggest losers was billionaire tycoon’s Li Ka-shing’s CK Hutchison Holdings, which has British retail, ports and telecom investments and fell 2.5%.