The major Asia-Pacific stock indexes are trading mostly higher Thursday following Wall Street’s solid performance on the news that British lawmakers rejected the idea of leaving the European Union without a Brexit deal in place. China’s major index is the lone loser following the release of mixed domestic economic data.
At 02:53 GMT, Japan’s Nikkei 225 Index is trading 21431.28, up 141.04 or +0.66%. Hong Kong’s Hang Seng Index is at 28862.87, up 55.42 or +0.19% and South Korea’s KOSPI Index is trading 2149.55, up 1.14 or +0.05%.
Australia’s S&P/ASX 200 finished at 6162.50, up 1.40 or +0.02%, but China’s Shanghai Index is lower at 2989.87 or -37.08 or -1.22%.
Reaction to Brexit Decision Decisive and Positive
Investors bought stocks aggressively on the opening after U.K. lawmakers rejected the idea of leaving the EU without a deal in place under any circumstance. The news seemed to catch traders by surprise, especially those who were betting on the worst outcome with short positions. Initially, Prime Minister Theresa May’s government had asked Parliament to vote on ruling out a no-deal Brexit for the official March 29 deadline.
May could become the victim when the euphoria settles. By rejecting the idea of leaving the European Union without a Brexit deal in place, U.K. lawmakers may have sent a strong message that May’s days as Prime Minister are limited. By severely undermining May’s authority, she may be forced to resign or eventually be ousted from office.
The next step for lawmakers will be to seek an extension to Article 50, which oversees the withdrawal process from the EU, and thus extends the departure date beyond the March 29 deadline. Members will vote on this issue on Thursday evening. After hearing arguments from U.K. politicians on why they are requesting the delay, European Union officials could accept or reject this proposal. This decision should be another source of heightened volatility for investors.
China Economic Data Disappointing
China reported on several key economic indicators earlier in the session. Fixed Asset Investment rose to 6.1%, matching the forecast. Retail Sales matched the previous month, but came in slightly better than the 8.1% forecast.
On the negative side, Industrial Production came in at 5.3%, missing the 5.5% forecast and coming in lower than the previously reported 5.7%. Additionally, the Unemployment Rate rose to 5.3% from 4.9%.
The weakness in China’s Shanghai Index indicates traders were disappointed by the news that growth in China’s industrial output fell to a 17-year low in the first two months of the year, pointing to further weakness in the world’s second-biggest economy.
This article was originally posted on FX Empire