Asia set to trade cautiously despite gains on Wall Street

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Asia Pacific markets were set to trade cautiously on Wednesday despite an overnight rally on Wall Street.

Nikkei futures pointed to a relatively flat open in the Japanese market.

In Australia, the benchmark ASX 200 rose 0.17 percent in early trade as the heavily-weighted financial subindex added 0.56 percent, with the country’s so-called Big Four banks rising.

Global markets received a boost on Tuesday, and analysts attributed the positive sentiment to China signaling more stimulus measures to come, including larger tax cuts, amid concerns of a slowdown in the world’s second-largest economy.

Meanwhile, Prime Minister Theresa May’s plan on how Britain should exit the European Union was overwhelmingly voted down in the House of Commons, which is the U.K.’s lower house of parliament. Though the move was widely expected, reports suggested it was the largest defeat for a sitting government in U.K. political history.

The British pound traded at $1.2862 on Wednesday morning at 7:42 a.m. HK/SIN, recovering from a sharp decline below $1.2740 overnight.

“Sterling rallied following the defeat of the withdrawal agreement due to strong cross-party support to prevent a no deal from occurring on 29 March,” analysts at ANZ Research wrote in a morning note.

The British government now has just three working days to map out a new plan of action. But the ANZ analysts noted it is “unlikely to achieve much, given the level of opposition to the withdrawal agreement, unless there is a U-turn from Brussels.” They added that gains in the pound is “limited by the prevailing uncertainty.”

Elsewhere, the dollar index, which measures the greenback against a basket of its peers, last traded at 96.039. The Japanese yen, considered a safe-haven asset, fetched 108.67 to the dollar while the Australian dollar traded at $0.7203.

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