Asian markets ease after May’s Brexit vote defeat

Asia markets took a break on Wednesday, as investors assessed and looked for direction after the British Parliament overwhelmingly rejected its Prime Minister (PM) Theresa May’s Brexit deal. Markets also tuckered out from the earlier growth stimulus announcement from China.

Britain’s Members of Parliament voted a 432 to 202 vote to reject Mrs May’s deal on Tuesday, and British newspapers called the outcome ‘a complete humiliation’, ‘no deal, no hope, no clue, no confidence’ and Mrs May ‘the humiliated PM’.

By late afternoon in Singapore, Singapore’s Straits Times Index edged up 0.28% or 9.09 points, at 3,221.39, while FTSE Bursa Malaysia Kuala Lumpur Composite Index eased lower by 0.48% or 8.09 points, at 1,671.33.

Chinese indices also saw muted trading with the Hang Seng Index closing higher by 0.27% or 71.81 points, at 26,902.10, while the Shanghai Composite Index ended the day’s session flat or 0.08 points higher, at 2,570.42. The smaller Shenzhen Composite was little changed, down by 0.12%.

Tokyo’s Nikkei 225 index dipped 0.55% or 112.54 points, to close the mid-week trading at 20,442.75 points, while the broader Topix Index was lower by 0.32% or 4.95 points, at 1,537.77 points.

Brexit vote defeat sheds optimism on Britain not exiting the bloc on a bad deal

The Sterling had rallied to more than a two-month high on Monday night to hit US$1.2912 before United Kingdom’s (UK) Brexit vote was cast. It last traded at US$1.2885, at around 4.00pm, Singapore time.

‘An overwhelming defeat for the UK parliament vote on the Brexit draft deal had been within expectations, yielding little changes for the market,' IG market analyst Pan Jingyi commented.

‘It still looks as if “no deal” is the least-likely option, and on this basis, markets are happy to take a more optimistic view, although anything could still happen,’ cautioned IG market analyst Chris Beauchamp.

‘But if the UK is going to exit it all, it now looks to be on the softest possible terms, something that will please investors and may even make UK assets a lot more attractive … there is a lot of uncertainty to be removed first, and even a delay to Brexit until later in the year does not change this,’ Mr Beauchamp added.