Asia stocks up as UK leans toward ‘remain’

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HONG KONG: Asia led a rally in global markets Monday, building on gains at the end of last week as polls suggest Britain’s upcoming referendum will result in the country staying in the European Union.

The average of the last six British European Union referendum polls put the Remain and Leave camps neck-and-neck at 50-50, excluding undecided voters, according to the What UK Thinks website.

Markets across Asia and Europe slid early last week as polls showed the Leave side a few percentage points for the June 23 vote, but showed some improvement Friday as the Remain camp gained ground.

The upswing comes after the International Monetary Fund warned that a Brexit vote could deal a “negative and substantial” blow to the British economy, adding that the “contagion effects” of a vote to leave the bloc could hit markets worldwide.


Tokyo closed up 2.34 percent, adding to gains of one percent at the end of last week to finish at 15,965.30. Hong Kong was up 1.69 percent by close, its steepest gain in two weeks.

After ending the morning slightly down, Shanghai eked out gains to close 0.13 percent, or 3.70 points, up at 2,888.81. The Shenzhen Composite Index, which tracks stocks on China’s second exchange, rose 0.44 percent.

European markets rose strongly at the start of trading with London’s benchmark FTSE 100 index jumping 2.10 percent, and Frankfurt and Paris up 2.30 and 2.60 percent respectively.

Gold was down 0.38 percent Monday, having hit a near two-year peak on Friday as investors sought the commodity on fears of the impact of a “leave” vote on the world economy.

‘Risk-on move’
The yen, often seen as a safe haven, eased slightly to 104.56 to the dollar in afternoon trade in Tokyo, from 104.19 yen in New York Friday as the “Stay” camp appeared to gain strength in the polls.

“We are seeing a risk-on move after the latest Brexit poll,” Niv Dagan, executive director at Peak Asset Management LLC in Melbourne, told Bloomberg.

“It may be short-lived and volatility is likely to remain high until Thursday’s vote. This really could still go either way.”

Oil prices extended gains on a weaker dollar, driving up demand for the commodity.
US benchmark West Texas Intermediate for July delivery was up 77 cents to $48.75 a barrel, while international benchmark North Sea Brent for August delivery was up 90 cents, trading at $50.07 a barrel.

AFP

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