Global stocks, oil rise but volatility remains... Equities most exposed says research...
Global stocks, oil rise but volatility remains
Tuesday’s trading has started with a more positive note as equities in Asia and Europe gain and oil prices are trending higher, however the Brexit fallout will continue to add a cautious tone to markets.
Oil prices are rising due to a proposed strike by oil workers in Norway, the largest producer in Europe, which hinges on wages talks. There is a Friday deadline and if the matter can’t be resolved then workers will strike from the weekend. Prices are up more than 2 per cent, easing some of the losses of the previous session.
Asian equity markets closed mostly higher for the second time this week. Asian investors are less exposed to the Brexit impact than those in Europe and North America and analysts are suggesting that any negative effects will be short-term.
More surprising perhaps are the gains in European markets, led by London and Frankfurt which are more than 2 per cent higher so far. After 2 days of sell-offs, there may be some bargain-buying.
European leaders meet in Brussels Tuesday and outgoing UK prime minister David Cameron is expected to face pressure to trigger Article 50 which would officially begin the Brexit process. Officials in the EU have ruled out any talks, even informally, with the UK until the process is official.
The UK pound hit a new 31-year low Monday.
Wall Street and Toronto are expected to open higher following losses in the previous session.
Equities most exposed says research
Research from investment risk analysts Axioma suggests that equities are most at risk from Brexit. The study, conducted before the referendum, considered that equity markets would be under greater pressure than currencies in terms of asset class.
The ‘Brexit stress test’ found that UK equities could fall by as much as 25 per cent with a ripple effect to other markets. The currency market would be hit by a reduction of between 1 to 4 per cent.
Tuesday’s trading has started with a more positive note as equities in Asia and Europe gain and oil prices are trending higher, however the Brexit fallout will continue to add a cautious tone to markets.
Oil prices are rising due to a proposed strike by oil workers in Norway, the largest producer in Europe, which hinges on wages talks. There is a Friday deadline and if the matter can’t be resolved then workers will strike from the weekend. Prices are up more than 2 per cent, easing some of the losses of the previous session.
Asian equity markets closed mostly higher for the second time this week. Asian investors are less exposed to the Brexit impact than those in Europe and North America and analysts are suggesting that any negative effects will be short-term.
More surprising perhaps are the gains in European markets, led by London and Frankfurt which are more than 2 per cent higher so far. After 2 days of sell-offs, there may be some bargain-buying.
European leaders meet in Brussels Tuesday and outgoing UK prime minister David Cameron is expected to face pressure to trigger Article 50 which would officially begin the Brexit process. Officials in the EU have ruled out any talks, even informally, with the UK until the process is official.
The UK pound hit a new 31-year low Monday.
Wall Street and Toronto are expected to open higher following losses in the previous session.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,140.24 (-1.50 per cent) | -4.10 per cent | -4.49 per cent |
| TSX Composite | 13,689.79 (-1.45 per cent) | -2.95 per cent | -7.55 per cent |
| Europe (at 4.30am ET) |
|||
| UK FTSE | 6,100.97 (+1.99 per cent) | -2.71 per cent | -9.66 per cent |
| German DAX | 9,468.30 (+2.15 per cent) | -7.95 per cent | -17.61 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,136.40 (+0.51 per cent) | +2.41 per cent | -27.67 per cent |
| Japan Nikkei | 15,323.14 (+0.09 per cent) | -8.98 per cent | -26.00 per cent |
| Other Data (at 4.30am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 48.17 (+2.14 per cent) |
47.35 (+2.20 per cent) |
1314.20 (-0.79 per cent) |
U$0.7710 |
| Aus. Dollar |
|||
| U$0.7411 | |||
Equities most exposed says research
Research from investment risk analysts Axioma suggests that equities are most at risk from Brexit. The study, conducted before the referendum, considered that equity markets would be under greater pressure than currencies in terms of asset class.
The ‘Brexit stress test’ found that UK equities could fall by as much as 25 per cent with a ripple effect to other markets. The currency market would be hit by a reduction of between 1 to 4 per cent.
