Post Brexit Recovery Continues in Asia

Asian markets continue to recover this morning as the join the global post-Brexit global recovery. This morning we saw the Nikkei and Australian stock bourses reverse earlier losses.

The Australian S&P ASX 200 reversed earlier losses of 0.38 percent to close marginally higher. The index was weighed down by the financials sub-index which was down nearly half a percent. This sub-index is very heavily weighted. The major banks in the Down Under were under pressure the entire trading session. Shares of the Commonwealth Bank of Australia lost over one percent.

In Japan, the Nikkei 225 retraced early losses of 0.44 percent to also close higher. The South Korean Kospi Composite rose on the day and stocks in Hong Kong rose over one percent. Stock exchanges on mainland China were also higher on the day.

Right now, the Brexit is hanging in limbo as the British have yet to “Article 50” and proceed with the divorce from the European Union. It looks like, Britain is waiting on the next government to be installed before pulling the trigger moving onto the next phase. It is in Britain’s favor to start negotiating with the EU now, before article 50 is enacted. Right now markets, in London and Europe are running on the fuel by the dovish comments made by the Bank of England.

Australian National Elections have Little Impact with Asia

Over the weekend, the Australian federal election to show a clear winner. The major political parties failed to gain a majority which raises the concerns of political uncertainty in the Country. Right now, it looks like there will be a hung parliament and the Australian financial markets are unlikely to be happy with this outcome.

Thanks to the election outcome, the Australian Dollar fell to a low of $0.7438 before retracing dome losses to trade at $0.7495 at 1034 HK time.