Asia stocks gain as Brexit fears ebb slightly, safe-havens retreat

Tuesday, 21 June 2016 00:21 - - {{hitsCtrl.values.hits}}

Reuters: Asian stocks gained across the board on Monday as fears that Britain would vote to leave the European Union abated a little, aiding a recovery in both sterling and investor risk appetite.

Safe-haven assets and currencies like gold, government bonds and the yen retreated.

Spreadbetters expected equities to remain on the upswing, forecasting a significantly higher open for Britain’s FTSE, Germany’s DAX and France’s CAC.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3%.

Australian stocks added 1.4% and South Korea’s Kospi rose 1.5%.

Japan’s Nikkei climbed 2.4%, helped by a retreat in the recently bullish yen.

“Those who were risk averse are reversing their positions,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.

“Sentiment was extremely negative last week, but it’s recovering now, though we should not be overly optimistic.”

Three British opinion polls ahead of the EU membership referendum on June 23 showed the “Remain” camp recovering some momentum, although the overall picture remained one of an evenly split electorate.

Global markets, buffeted this month by Brexit woes, had a breather at end of last week from a three-day suspension in British campaigning following the fatal attack on lawmaker Jo Cox, a strong supporter of Britain staying in the EU.

“It is hard to think the market’s calmer tone to end last week is going to be an ongoing theme this week, particularly as Brexit campaigning and the release of opinion polls has resumed again,” wrote strategists at ANZ.

“To be fair, the sad murder of UK politician Jo Cox may see the rhetoric from both camps get toned down somewhat. But markets will still, no doubt, swing about with movements in opinion polls, just as they did last week.”

The pound meanwhile climbed 1.5% to $ 1.4580 GBP=D4, extending a recovery from last week’s two-month trough of $ 1.4013. It jumped 2% to 152.72 yen GBPJPY=R, pulling well away from a three-year trough of 145.34 set on Thursday.