Majority of Asian stock market indices were trading higher on Tuesday (21 June), including the Shanghai Composite Index, which was up 0.22% at 2,895.29 at 5.53am GMT. This followed Footsie closing higher by more than 3% overnight, as support for the Remain campaign gathered momentum ahead of the 23 June EU referendum.
Investors in the region continue to be concerned over Brexit fears as it has been widely believed and reported by many that UK leaving EU will have an adverse impact on both the country's as well as the global economy. The International Monetary Fund (IMF) last week stated that Brexit would have "negative and substantial" consequences on UK's economy, which could be pushed into recession. It also warned that there would be an increase in unemployment, wages would reduce, there would be fuel inflation and living standards would be affected.
Sean Keane at Triple T Consulting said, "Until the results of the vote come through late on Thursday, trading will continue to be dominated by the increasingly frequent opinion polls that will appear this week. These tape bombs will diminish liquidity, cause trading spreads to widen and will ensure that risk appetite will remain a function of the political polls. The sooner Thursday comes around the better."
Further, investors are closely awaiting Federal Reserve chair Janet Yellen's two-day testimony before Congress which is scheduled to start on 21 June. This is because of the possibility that she may offer clues over the next increase in US interest rates.
Andrew Meredith, co-managing director at Tyton Capital Advisors said, "With Yellen's congressional testimony and the UK referendum on our doorstep, markets all around are exercising caution."
Indices in the rest of Asia traded as follows on 21 June at 6.05am GMT:
|Hong Kong||Hang Seng Index||20,646.93||Up||0.67%|
Overnight (20 June), the Dow Jones Industrial Average closed at 17,804.87, up 0.73%, while the FTSE 100 closed at 6,204.00, up 3.04%.
Among commodities, oil prices – that gained on 20 June over easing of Brexit fears – slipped on Tuesday. While WTI crude oil was trading 0.69% lower at $49.03 (£33.34, €43.27) a barrel, Brent crude was trading 0.71% lower at $50.29 a barrel at 6.13am GMT.