World stocks stabilize as investors’ ‘Brexit’ anxiety eases

Author: Associated Press

HONG KONG (AP) – World stock benchmarks stabilized Tuesday after days of stomach-churning swings as investors started shaking off the jitters from Britain’s vote to quit the European Union and its messy aftermath.

European benchmarks rose in early trading, with France’s CAC 40 up 1.2 percent to 4,084.22 and Germany’s DAX up 2.2 percent to 9,469.34. Britain’s FTSE 100 rose 2.2 percent to 6,110.54. U.S. stocks were poised to open higher. Dow futures climbed 1.2 percent to 17,194.00 and broader S&P 500 futures were up 1.2 percent to 2,008.20.

Uncertainty and anxiety over the outcome of last week’s vote roiled global financial markets, sent the pound to its lowest level in three decades and prompted ratings agencies to slash their top-shelf credit rating for the U.K.

However, selling pressure was easing as British Prime Minister David Cameron, who has signaled he might not trigger a clause setting in motion the U.K.’s exit from the EU, headed to Brussels on Tuesday afternoon to discuss the situation with European Union lawmakers.

Asian markets bounced back from early losses as leaders signaled they were ready to step in with support policies. Japanese Prime Minister Shinzo Abe instructed officials to take steps to reassure markets, 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 0.1 percent to 15,323.14 while South Korea’s Kospi added 0.5 percent to 1,936.22. The Shanghai Composite Index in mainland China climbed 0.6 percent to 2,912.56 while Australia’s S&P/ASX 200 slipped 0.7 percent to 5,103.30. Benchmarks in Taiwan, Singapore, Thailand and Indonesia rose.

Hong Kong’s Hang Seng Index was a laggard, losing 0.3 percent to 20,172.46. It was dragged down by companies with high exposure to Europe, such as billionaire tycoon’s Li Ka-shing’s CK Hutchison Holdings, which has British retail, ports and telecom investments and fell 1.7 percent.

“When you pull a spring, after you let it go it oscillates up and down for a little while and that’s still what we’re seeing in the markets,” said Andrew Sullivan, a sales trader at Haitong Securities. “This is nothing about individual companies per se, this is about the effect of forex on their earnings,” he said.

In currencies, the British pound regained some lost ground after falling the day before to a new 31-year low. It rose to $1.3320 from $1.3239 in late trading Monday.

The yen eased slightly against the dollar, though it was still hovering near its strongest level in two years. The dollar rose to 102.20 yen from 101.90 in late trading Monday. The euro strengthened to $1.1072 from $1.1020.

Benchmark U.S. crude rebounded $1.04 to $47.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract slid $1.31, or 2.7 percent, to settle at $46.33 a barrel on Monday. Brent crude, used to price international oils, rose $1.01 to $48.17 a barrel in London.

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