Asian shares higher despite growth worries, Brexit limbo

Annabelle Liang, The Associated Press</span>
Published Wednesday, January 16, 2019 12:05AM EST
Last Updated Wednesday, January 16, 2019 3:37AM EST

SINGAPORE -- Shares were mostly higher Wednesday in Asia as investors shrugged off the parliamentary vote against British Prime Minister Theresa May's plan for leaving the European Union. Weak Japanese data pulled the Nikkei 225 index lower.

KEEPING SCORE: Japan's Nikkei 225 index slipped 0.6 per cent to 20,442.75 while South Korea's Kospi added 0.4 per cent to 2,106.10. Hong Kong's Hang Seng edged 0.1 per cent higher to 26,867.11. Australia's S&P ASX 200 rose 0.4 per cent to 5,835.20. The Shanghai Composite index was flat at 2,569.75. Shares fell in Taiwan, but rose in Singapore, Malaysia and Indonesia.

WALL STREET: U.S. indexes climbed Tuesday to their highest level in a month after Chinese officials said measures were in place to help the world's second largest economy through a slowdown. Technology companies rallied after Netflix announced its biggest price increase in history. The broad S&P 500 index jumped 1.1 per cent to 2,610.30. The Dow Jones Industrial Average rose 0.7 per cent to 24,065.59. The Nasdaq composite, which has many technology stocks, jumped 1.7 per cent at 7,023.83.

BREXIT VOTE: British Prime Minister Theresa May suffered a major setback Tuesday when lawmakers rejected a Brexit deal by 432 votes to 202. She was expected to lose despite last-minute campaigning, as the deal she had brokered with the EU was widely unpopular. Britain is set to leave the bloc on March 29. Markets were largely unaffected by the development and the British pound, which tumbled before the vote, bounced back after the verdict. May faces a no-confidence vote later Wednesday that could trigger a general election but she is expected to survive it.

ANALYST'S TAKE: "The parliament's vote came as no surprise because everybody predicted it will be overwhelmingly rejected," said Francis Lun, a stock analyst in Hong Kong. "Actually what it does is really remove uncertainty that Britain will leave the EU. I think we are on firmer ground now that eventually Britain will stay in the EU."

JAPAN ECONOMY: On Wednesday, Japan said its core machinery orders were flat in November at 863.1 billion yen, compared with October's 7.6 per cent rise. This was also lower than analysts' expectations of a 3 per cent increase. There was a sharp drop in orders from the manufacturing sector, although overseas orders climbed. The data suggests Japanese companies may be less confident in making big-ticket purchases in the face of global risks.

CHINESE GROWTH: Senior Chinese economic leaders, in outlining their policy plans for 2019, have promised to cut taxes and keep monetary policy flexible to help the country weather a slowdown. The news lifted Chinese shares and global financial markets on Tuesday. Buying eased on Wednesday as traders took stock of the country's falling exports to the U.S. amid a costly trade dispute. Both sides have pledged to work on their issues, but there seems to be a long road ahead with higher-level negotiations to come.

ENERGY: Benchmark U.S. crude oil was 5 cents higher at $52.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract added $1.60 to settle at $52.11 per barrel on Tuesday. Brent crude, the international standard, rose 11 cents to $60.75. It gained $1.65 to $60.64 a barrel in London.

CURRENCIES: The dollar slipped to 108.51 yen from 108.69 late Tuesday. The euro eased to $1.1398 from $1.1413. The British pound weakened to $1.2844 from $1.2859.

--------

AP Markets Writer Marley Jay contributed.

Let's block ads! (Why?)