Asian stocks mostly lower following volatile session on Wall Street
- Wall Street had a volatile session overnight which saw the Dow recover from a 507-point drop.
- Meanwhile, U.K. Prime Minister Theresa May delayed a Brexit vote that was set to take place on Tuesday in the U.K. parliament. The pound plunged to 21-month lows on the back of that announcement.
- Also on Monday, the Reserve Bank of India’s chief, Urjit Patel, resigned abruptly, stoking concerns over the independence of the central bank.
Stocks in Asia traded mostly lower in the morning on the back of a volatile session on Wall Street which saw the Dow recover from a 507-point drop.
In Japan, the Nikkei 225 slipped 0.21 percent in early trade while the Topix index fell by 0.46 percent.
Meanwhile, South Korea’s Kospi saw fractional losses. Australia’s ASX 200, on the other hand, rose 0.39 percent in morning trade, with most sectors seeing gains.
UK government delays Brexit vote
Prime Minister Theresa May delayed a Brexit vote that was set to take place on Tuesday in the U.K. parliament.
The move was confirmed in a statement by May to lawmakers in the House of Commons on Monday afternoon.
The now-delayed vote in the House of Commons, termed the “meaningful vote,” was to allow lawmakers to accept or reject the terms of Brexit that the EU and British government had previously agreed.
May claimed that while there was broad support for her deal, the issue of the Northern Irish backstop remained a concern and she would return to European counterparts to renegotiate the deal.
The British pound fell to a 21-month low of $1.266 following the announcement. It last traded at $1.2553.
Wall Street bounces from declines
In overnight market action stateside, the Dow Jones Industrial Average erased an intraday 507-point drop to close 34.31 points higher at 24,423.26 while the S&P 500 advanced 0.2 percent to finish the trading day at 2,637.72. The Nasdaq Composite rose 0.7 percent to close at 7,020.52.
Oil prices on shaky ground amid global financial market worries
Oil prices remained on shaky ground on Tuesday after sliding by 3 percent the previous day, pressured by weakness in global stock markets and doubts that planned supply cuts led by producer club OPEC will be enough to rein in oversupply.
U.S. West Texas Intermediate (WTI) crude futures were at $51 per barrel , unchanged from their last close.
Crude prices dropped by 3 percent the session before amid ongoing weakness in global stock markets and concerns that slowing oil demand-growth could erode supply cuts announced last week by the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including Russia.
RBI chief departs abruptly
The Reserve Bank of India’s governor, Urjit Patel, resigned with immediate effect on Monday, raising concerns over the independence of the central bank.
The primary focus for investors is whether Patel resigned due to growing pressure from India’s government to lower rates and conduct looser monetary policy as the countdown to next year’s general election kicks off. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector.
Following the announcement, the rupee fell sharply against the dollar. The Indian currency was last at 72.49 against the greenback, after trading above 71.20 earlier.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.219 after rising from levels around 96.4 earlier.
The Japanese yen traded at 113.17 against the dollar after seeing highs around above 112.2 yesterday. The Australian dollar was at $0.7188 after touching highs above $0.722 in the previous session.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.8996 vs the previous day’s close of 6.9099.
Source : Reuters