The entire clutch of Asian stock market indices were trading higher on Monday (4 July), including the Shanghai Composite Index, which was up 1.70% at 2,982.36 as of 5.17am GMT. This seemed to be part of the post-Brexit rally after investors seemed to douse their fears of the impact of the UK leaving the European Union (EU).
However, a few analysts said that despite the recent rally in the financial markets, there was uncertainty surrounding the Brexit impact. Vishnu Varathan, a senior economist at Mizuho Bank was quoted by CNBC as saying, "The ball is on the U.K.'s court to invoke 'Article 50'... But until a new government is installed, this trigger is unlikely to be pulled." He added that it would be advantageous for the UK to start talks with the EU before triggering Article 50, which basically refers to the right of a EU member nation to withdraw from the bloc.
The rally in the Asian markets also follows a deadlock in Australia's general election over the weekend. While the counting of the remaining one-fifth of votes is said to be scheduled for Tuesday (5 July), as of now there is no single major party that has won enough seats required to form a majority government. According to the official Australian Election Commission tally, the ruling Liberal-National coalition led by Prime Minister Malcolm Turnbull holds 65 seats while Labour led by Bill Shorten has won 67 seats as on the morning of 3 July (Sunday), with 77% of the votes counted.
Indices in the rest of Asia traded as follows on 4 July at 5.37am GMT:
|Hong Kong||Hang Seng Index||21,092.99||Up||1.44%|
Last week (1 June), the Dow Jones Industrial Average closed at 17,949.37, up 0.11% while the FTSE 100 closed at 6,577.83, up 1.13%.
Among commodities, Brent crude was trading higher amid the Saudi energy minister's recent statements that the crude market was balancing. While WTI crude oil was trading unchanged at $48.99 a barrel, Brent crude was trading 0.10% higher at $50.40 (£37.91, €45.24) a barrel at 5.45am GMT.