HONG KONG , China (AFP) — Asian markets turned lower Wednesday following a negative lead from Wall Street and Europe, with analysts saying Britain’s shock decision to call a snap election added to global uncertainties.
The pound held on to its gains after Prime Minister Theresa May announced a snap poll for June 8 as she looks to cement a mandate heading into key Brexit talks with her European Union counterparts.
The move comes as France prepares for the first round of its presidential elections at the weekend, while Germany is set for a vote this year, both of which could have huge implications for the future of the eurozone.
Added to that, said Greg McKenna, chief market strategist at AxiTrader, was the face-off between the United States and North Korea, and the cooling of relations between Washington and Moscow over the Syria crisis.
May’s announcement “has added another layer of uncertainty for traders,” McKenna added. “It all sounds dire at the moment.”
The news sent the pound surging more than two percent against the dollar, which hammered London stocks the most since last June’s referendum to leave the EU. The FTSE fell 2.5 percent, while the Dow sank 0.6 percent on Wall Street.
By the end of the morning session in Tokyo the Nikkei index was flat.
Hong Kong slipped 0.5 percent, Shanghai sank 1.2 percent, Sydney lost 0.4 percent and Singapore gave up 0.6 percent. There were also losses in Taipei, Manila and Wellington.
Safe haven assets were also holding up as investors fret over the global outlook. Gold is up more than two percent since Donald Trump ordered missile strikes on a Syrian airbase 12 days ago, sparking fears of a possible conflict with Russia, which is backing the Damascus regime.
The yen was also sitting around five-month highs against the dollar.
There was a “growing wait-and-see mood due to such uncertainties as the French election and British snap poll,” said Okasan Online Securities chief strategist Yoshihiro Ito in a commentary.
Key figures at 0230 GMT
Tokyo – Nikkei 225: FLAT at 18,417.54 (break)
Hong Kong – Hang Seng: DOWN 0.5 percent at 23,800.54
Shanghai – Composite: DOWN 1.2 percent at 3,159.93
Pound/dollar: DOWN at $1.2835 from $1.2840 at 2100 GMT
Pound/euro: DOWN at 1.1970 euros from 1.1972 euros
Euro/dollar: DOWN at $1.0725 from $1.0732
Dollar/yen: DOWN at 108.43 from $108.45 yen
Oil – West Texas Intermediate: DOWN four cents at $52.37 per barrel
Oil – Brent North Sea: DOWN six cents at $54.83
New York – Dow: DOWN 0.6 percent at 20,523.28 (close)
London – FTSE 100: DOWN 2.5 percent t 7,147.50 (close)
© Agence France-Presse
