HONG KONG, March 26 — Asian markets mostly rose today after the previous day’s steep losses, though investors trod cautiously as they grow increasingly anxious about the state of the global economy.
With a mixed lead from Wall Street, there were few catalysts to drive buying, while safe-haven flows saw the dollar edge up against high-yielding currencies.
Attention is also back on London, where MPs essentially wrested control of the Brexit debate from Prime Minister Theresa May with a vote that will allow them to decide on a number of possibilities for how to proceed.
Investors slowly edged back to the market but they were suffering a hangover from yesterday’s pummelling, which came on the back of a drop in benchmark 10-year Treasury bond yields below those for three-month bills for the first time since before the global financial crisis.
This so-called inverted yield curve shows investors are more willing to buy long-term debt — usually viewed as a higher risk — as they consider the short-term outlook more hazardous. Such a scenario has preceded several recessions in recent decades.
“Recession worries may be premature for the US, but the negative signals are consistent with the recent data,” said OANDA senior market analyst Edward Moya.
May’s fresh crisis
Tokyo led gains, jumping more than two per cent — having dived three per cent yesterday — while Hong Kong edged 0.2 per cent higher, Sydney added 0.1 per cent, Singapore put on 0.4 per cent and Seoul was up 0.2 per cent.
Wellington, Taipei, Manila, Mumbai and Jakarta also rose, while Bangkok barely moved as rival camps jostled for position, hoping to form a government after Thailand’s first election since a coup.
However, Shanghai tumbled 1.5 per cent.
In Britain, the Brexit saga took a new twist when lawmakers inflicted yet another defeat on May by voting to take control of parliamentary business that will see them hold a series of ballots on different options for leaving the EU.
They will now choose whether to revoke Article 50 and cancel Brexit, hold another referendum, vote for a deal including a customs union and single market membership, or leave the EU without a deal.
However, even if they decide a majority course of action, the government is not legally bound to follow their instructions.
The move came after the premier admitted she still had not secured the votes needed to get her Brexit deal through parliament.
EU leaders last week delayed the divorce but warned that unless May can push her withdrawal deal through, Britain must come up with a new plan by April 12 — or leave its closest trading partner with no deal at all.
While uncertainty reigns, the sterling was holding its own against the dollar, with investors still hopeful Britain will avoid a no-deal Brexit, which some warn could be an economic calamity for the country.
In early trade London and Frankfurt were barely moved, while Paris rose 0.1 per cent.
Key figures around 0820 GMT
Tokyo – Nikkei 225: UP 2.2 per cent at 21,428.39 (close)
Hong Kong – Hang Seng: UP 0.2 per cent at 28,566.91 (close)
Shanghai – Composite: DOWN 1.5 at 2,997.10 (close)
London – FTSE 100: FLAT at 7,7179.79
Pound/dollar: UP at US$1.3204 from US$1.3198 at 2100 GMT
Euro/dollar: DOWN at US$1.1309 from US$1.1313
Dollar/yen: UP at 110.13 yen from 109.96 yen
Oil – West Texas Intermediate: UP 41 cents at US$59.23 per barrel
Oil – Brent Crude: UP 19 cents at US$67.40 per barrel
New York – DOW: UP 0.1 per cent at 25,516.83 (close)
— AFP
