World stocks rise but Britain slips on Brexit limbo

Annabelle Liang, The Associated Press</span>
Published Wednesday, January 16, 2019 12:05AM EST
Last Updated Wednesday, January 16, 2019 7:59AM EST

SINGAPORE -- World stock markets mostly rose on Wednesday, but fell in Britain, as investors reacted to the parliamentary defeat of British Prime Minister Theresa May's plan for leaving the European Union.

KEEPING SCORE: In Europe, Germany's DAX rose less than 0.1 per cent to 10,892 and France's CAC 40 added 0.3 per cent to 4,797. Britain's FTSE 100 sank 0.5 per cent to 6,861. Wall Street was positioned for gains, with Dow and S&P 500 futures both gaining 0.1 per cent.

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 for the widely unpopular deal she had brokered with the EU. Britain is set to leave the bloc on March 29. World markets were largely unaffected and the British pound tumbled before the vote but bounced back afterward. May faces a no-confidence vote later Wednesday that could trigger a general election but she is expected to survive it.

ANALYSIS: Some experts say the rejection of May's deal means there is actually a lower chance that Britain will leave the EU without a deal, though it could require a delay to the Brexit date. Many lawmakers are against leaving the EU without a deal -- which would hurt the economy severely -- but are divided on what to do next. The options include leaving with closer ties to the EU or even a second vote on Brexit, though it is unclear how they would come to any agreement. "The size of the defeat appears to reduce the chances of the U.K. leaving the EU without a deal on 29th March," says Paul Dales, chief U.K. economist at Capital Economics in London.

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.

ASIA'S DAY: Japan's Nikkei 225 index, weighed down by weak machinery orders in December, slipped 0.6 per cent to 20,442.75. South Korea's Kospi added 0.4 per cent to 2,106.10 and Hong Kong's Hang Seng rose 0.3 per cent to 26,902.10. Australia's S&P ASX 200 added 0.4 per cent to 5,835.20 while Shanghai's Composite index was flat at 2,570.42. Shares fell in Taiwan and Indonesia but rose in Malaysia and Singapore.

ENERGY: Benchmark U.S. crude oil fell 42 cents to $51.69 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, dropped 27 cents to $60.37. It gained $1.65 to $60.64 a barrel in London.

CURRENCIES: The dollar rose to 108.78 yen from 108.69 late Tuesday. The euro edged down to $1.1385 from $1.1413, while the British pound withdrew to $1.2844 from $1.2859.

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