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Asia: Shares renew slump amid Brexit inaction as pound steadies


[WELLINGTON] Asian stocks resumed declines, while the pound took a breather following its record rout as the fallout from Britain's shock vote to leave the European Union continued to dominate trading. Some commodity-linked currencies rallied with crude oil.

After bouncing last session on speculation policy makers will bolster stimulus, Japanese shares reverted to losses as the yen strengthened. Elsewhere in markets there were signs of a tepid recovery, with sterling was little changed after tumbling 11 per cent following the Brexit decision.

Australia's dollar climbed for the first time in three sessions, rallying with US index futures as oil snapped its worst two-day slide since February. Gold hovered around its highest price in almost two years as industrial metals increased.

"Equity markets hate this sort of uncertainty," Grant Williamson, an investment adviser at Hamilton Hindin Greene, a brokerage in Christchurch, New Zealand, said by phone.

"This is uncharted territory as to how it all plays out with the exit negotiations. It's going to cause disruption to world trade and it will take quite some time for the UK to realign their economy."

Britain's vote to secede from the 28-nation bloc wiped almost US$4 trillion off the value of global equities, with investors selling riskier assets amid concern trade snarls and political paralysis will disrupt the already-fragile global economic recovery.

Markets were routed again on Monday after leaders in the UK went the weekend without providing guidance on how the country will be extricated from the EU. Prime Minister David Cameron, who resigned after the vote, will meet his fellow EU leaders for dinner Tuesday.


The MSCI Asia Pacific Index dropped 1.1 per cent as of 9:34 am Tokyo time, slipping for the second time in three days after gains in Japan and Australia sent it up 0.4 per cent on Tuesday. The regional benchmark was headed for its lowest close since April 5.

The Topix index sank 1.7 per cent in Tokyo, as the Kospi index in Seoul dropped 0.7 per cent and energy stocks drove Australia's S&P/ASX 200 Index down 1.6 per cent. New Zealand's S&P/NZX 50 Indexslipped 0.3 per cent, erasing Monday's advance.

E-mini futures on the S&P due in September, however, rose for the first time in three days, climbing 0.2 per cent to 1,989.75 after a 1.8 per cent slump in the underlying index on Monday.

The MSCI All-Country World Index lost 2.2 per cent to an almost four-month low last session as declines in the US and Europe outweighed gains in Japan. Chinese shares also rallied Monday.

Vietnam updates on gross domestic product and trade Tuesday, while the Philippines reports on its budget balance. The Bank of Korea also posts meeting minutes.