Most Asia markets end higher as region weathers a global rout after Brexit vote

Hitoshi Yamada | NurPhoto | Getty Images

Most Asian markets closed higher on Tuesday, managing to hold up better than global peers amid a rout that wiped out as much as $3 trillion of market capitalization, according to data from S&P Global, in the wake of the U.K.'s surprise decision to leave the European Union (EU).

The session's slide between red and green followed gains in some major Asian bourses on Monday, with analysts suggesting effects of a Brexit vote on the region would likely be short term.

In Japan, the Nikkei 225 closed nearly flat at 15,323.14, after wavering between gains and losses throughout the session. Across the Korean Strait, the Kospi added 9.37 points, or 0.49 percent, to 1,936.22, reversing earlier losses of nearly 0.5 percent.

Hong Kong's Hang Seng index was down 0.57 percent as of 3:09 p.m. HK/SIN. The Shanghai composite closed up 17.05 points, or 0.59 percent, at 2,912.75, and the Shenzhen composite gained 23.67 points, or 1.21 percent, to 1,970.37.

Australia's ASX 200 lost 33.93 points, or 0.66 percent, to 5,103.30, with the financials sub-index, which accounts for nearly half of the broader index, down 0.11 percent, retracing earlier losses of more than 1 percent. Major banking stocks in the country reversed losses, with shares of ANZ up 0.1 percent and NAB higher by 0.49 percent.

Analysts previously said the share-price performance of the Australian banks was likely to be influenced by the hammering received by U.K. and European banks, with analysts cutting ratings and target prices for many financial plays. The banking sector in Europe was off 7.7 percent.

"U.K. and European banks are getting destroyed, having the worst two-day move ever," said Chris Weston, chief market strategist at spreadbettor IG.

He added, "The U.K. referendum has not just left a stain on British politics (and society), but it has unmasked a number of macro concerns that were largely smoothed over in the wake of the coordinated central action in February."

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Weston said these concerns included the solvency of the European banking sector, the impact of a stronger dollar and the prospect of further depreciation of the yuan.

The dollar traded at around 96.042 against a basket of currencies on Tuesday afternoon Asia time, off an earlier high of 96.404. This was compared with levels below 94.00 before the outcome of the Brexit vote.

The pound took another tumble on Monday, falling to a fresh 31-year low against the dollar and extending losses to nearly 12 percent from levels before the Brexit results were announced.

As of 3:12 p.m. HK/SIN on Tuesday, Cable traded at $1.3275, after touching levels as low as $1.3122 overnight.

Ratings agency Standard & Poor's cut the U.K.'s credit rating on Monday by two notches, from AAA to AA, citing last week's referendum that approved a British exit from the European Union. Fitch lowered its rating from AA+ to AA.

The Japanese yen maintained strength against the dollar, trading at 102.06 as of 3:13 p.m. HK/SIN; the yen strength put some Japanese equities under pressure.

Major Japanese automakers sold off, with Toyota shares dropping 3.42 percent, Nissan off 1.14 percent and Honda off 1 percent. A stronger yen is a negative for exporters as it reduces their overseas profits when converted to local currency.

Shares of troubled airbag maker Takata closed up 2.18 percent, erasing earlier losses of more than 6.8 percent after a Reuters report that Honda said a Takata airbag inflator had ruptured in a fatal crash in Malaysia. Another Reuters report said Takata's CEO Shigehisa Takada said on Tuesday he would resign after a "new regime" is found for the auto parts supplier.

The Chinese yuan traded at 6.6494 against the dollar, after the People's Bank of China set the yuan midpoint fix at 6.6528. The dollar/yuan pair last closed at 6.6481.

Oil prices advanced during Asian hours, with global benchmark Brent up 1.65 percent to $47.94 a barrel, while U.S. crude was up 1.81 percent at $47.17.

Stateside, the Dow Jones industrial average closed down 260.51 points, or 1.5 percent, at 17,140.24; the S&P 500 index closed down 36.87 points, or 1.81 percent, at 2,000.54 and the Nasdaq composite finished down 113.54 points, or 2.41 percent, at 4,594.44.

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