The resignation on Monday of Nigel Farage as the head of the U.K. Independence Party (UKIP) has deepened uncertainty over global economic consequences after Britain voted to leave the European Union, triggering stock losses in Asia. Although central banks in Asia are planning stimulus measures to at least shield domestic economies from the Brexit shockwaves, some investors are doubtful over whether such monetary easing will make any difference.
The fact that Asian economies rely heavily on exports has made them vulnerable to the economic effects of Britain’s shock decision to ditch the EU. But Asian central banks are hoping that monetary easing would spur domestic demand to make up for what was lost in the global markets.
What transpired in Asian stock markets?
In Japan, the Nikkei 225 (INDEXNIKKEI:NI225) shed 106.47 points to fall 0.67% below its closing point on Monday. The banking, shipbuilding and machinery sectors led stock losses in Japan. It was a similar script in Taiwan where the Taiwan Weighted lost 44.51 points to decline 0.51% on the day. Oil, gas and electricity, trading and consumer goods sectors were the worst performing industries in Taiwan on Tuesday.
In Australia, the S&P/ASX 200 Index shed 53.78 points to pull back 1.02%. The central bank in Australia decided to hold interest rates steady.
But China bucked the broader Asian stock market trend. The Shanghai Composite added 17.14 points to rise 0.6% on Monday. However, Hong Kong’s smaller Hang Seng took a different route, sliding by 1.5%
In Europe, stocks opened lower on Tuesday with the EURO STOXX 50 down 0.81% in morning trading. Germany’s DAX 30 and France’s CAC 40 were also down 0.88% and 0.81% in morning trading.
In currencies, USD/JPY (JPYUSD) slipped 0.64% to 101.92 and EUR/JPY was down 0.78% to 113.52. GBP/USD (GBPUSD) was down 1.16% to 1.3133 to 31 year lows again in the morning hours. The AUD/USD (AUDUSD) fell 0.57% to 0.7497.