World stock markets stabilize as Brexit anxiety eases
HONG KONG - World stock markets rose on Tuesday after days of stomach-churning losses as investors started shaking off the jitters from Britain's vote to quit the European Union and its messy aftermath.
European benchmarks rose in early trading, with Britain's FTSE 100 up 2.5 percent to 6,131 and France's CAC 40 rising 2.6 percent to 4,088. Germany's DAX gained 2.1 percent to 9,462.
U.S. stocks were poised to open higher: Dow and S&P 500 futures both rose 1 percent.
The pound recovered 0.8 percent to $1.3336 but was still near its lowest levels since 1985.
Uncertainty and anxiety over the economic fallout from the vote had roiled global financial markets since Friday and prompted ratings agencies to slash their top-shelf credit rating for the U.K.
However, selling pressure was easing as British Prime Minister David Cameron, who has signaled he might not trigger a clause setting in motion the U.K.'s exit from the EU, was due to discuss the situation with his European Union counterparts on Tuesday.
Asian markets bounced back from early losses as leaders signaled they were ready to step in with support policies. Japanese Prime Minister Shinzo Abe instructed officials to take steps to reassure markets, Kyodo News agency reported, while South Korea's government unveiled a 20 trillion won ($17 billion) stimulus package and backup budget for big infrastructure projects.
Japan's benchmark Nikkei 225 index climbed 0.1 percent to 15,323.14 while South Korea's Kospi added 0.5 percent to 1,936.22. The Shanghai Composite Index in mainland China climbed 0.6 percent to 2,912.56 while Australia's S&P/ASX 200 slipped 0.7 percent to 5,103.30.
Hong Kong's Hang Seng Index was a laggard, losing 0.3 percent to 20,172.46. It was dragged down by companies with high exposure to Europe, such as billionaire tycoon's Li Ka-shing's CK Hutchison Holdings, which has British retail, ports and telecom investments and fell 1.7 percent.
"When you pull a spring, after you let it go it oscillates up and down for a little while and that's still what we're seeing in the markets," said Andrew Sullivan, a sales trader at Haitong Securities. "This is nothing about individual companies per se, this is about the effect of forex on their earnings," he said.
Beyond the pound, currencies have been hugely volatile, with the yen strengthen in recent days due to its perceived status as a safe haven. The euro had fallen on concern that Britain's trouble would hurt the rest of the region.
On Tuesday, the yen eased slightly against the dollar, though it was still hovering near its strongest level in two years. The dollar rose to 102.36 yen from 101.90 in late trading Monday. The euro strengthened to $1.1097 from $1.1020.
Benchmark U.S. crude rebounded $1.25 to $47.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract slid $1.31 on Monday. Brent crude, used to price international oils, rose $1.20 to $48.97 a barrel in London.
