The pound dropped on Friday in Asia as elections in the U.K. ended in a hung parliament, with regional indexes closing mostly higher.
U.K. Prime Minister Theresa May’s Conservative Party failed to win a clear majority at the end of the election, raising concerns over how Brexit negotiations will proceed in the weeks ahead. The Conservatives won 315 seats and the Labour Party had 261 seats as of 3:25 p.m. HK/SIN.
Labour leader Jeremy Corbyn said May should step down after the snap election she called to strengthen her mandate ended up weakening it.
The British pound tumbled on the back of political uncertainty in the U.K. Pound/dollar traded at $1.2648 at 2:55 p.m. HK/SIN after falling as low as $1.2704 overnight.
“Traditionally, (the) British pound has rallied with a Conservative win, but it remains debatable as to whether a hung parliament or a Labour win would have been the worst outcome for traders,” ThinkMarkets Senior Market Analyst Matt Simpson said in a morning note.
Asian markets mostly shrugged off the political uncertainty in the U.K.
Japan’s Nikkei 225 rose 0.52 percent or 104 points to finish the session at 20,013.26 and the Kospi gained 0.77 percent or 18.12 points to close at 2,381.69. Australia’s benchmark S&P/ASX 200 index was marginally higher, closing 0.02 percent or 1.203 points up at 5,677.8.
The Hang Seng Index was reversed earlier gains to edged lower by 0.35 percent while markets on mainland China closed in the money. The Shanghai Composite closed up by 0.27 percent or 8.4125 at 3,158.7461 and the Shenzhen Composite added 0.233 percent or 4.3083 to finish at 1,857.1653.
“The possibility of a reduced Conservative majority or event a minority government is unlikely to have a significant impact on broader global markets,” CMC Markets Chief Market Analyst Ric Spooner said in a Friday morning note, adding that the market moves would “likely be confined to the U.K.”
Meanwhile, shares of Man Wah resumed trading in Hong Kong today and regained losses made after short-seller Carson Block announced he was targeting the company earlier this week. The company also said in an announcement that Block’s accusations were “groundless” and “false.” Man Wah shares were up 8.62 percent.
Shares of Japan’s SoftBank Group surged 7.43 percent to close at 9,476 yen a stock following news the company had acquired robotics companies Boston Dynamics and Schaft from Alphabet.
In other currency news, the dollar gained against a basket of rival currencies to trade at 97.445 at 2:55 p.m. HK/SIN, higher than the 96 handle seen the past week. Against the yen, the greenback strengthened to trade at 110.42 and the Aussie/dollar traded mostly flat at $0.7537.
Oil prices traded lower. Brent crude declined 0.36 percent to trade at $47.69 a barrel and U.S. crude shed 0.35 percent to trade at $45.48.
In China, the consumer price index (CPI) for May rose 1.5 percent on year, in line with a Reuters poll, but dipped 0.1 percent on month. Meanwhile, the producer price index (PPI) reflected a 5.5 percent rise on year.
Stateside, stocks on Wall Street ended the session slightly higher following former FBI Director James Comey’s testimony before the Senate Intelligence Committee.
Source: CNBC
