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Tuesday, October 17, 2017

Asian markets fall on global uncertainty, pound holds rally

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By Agence France-Presse

Asian markets turned lower Wednesday following a negative lead from Wall Street and Europe, with analysts saying Britain’s shock decision to call a snap election added to global uncertainties.

A man walks past a display of the Hang Seng Index at a bank in Hong Kong Wednesday, Nov. 9, 2016. Asian shares have shed early gains, tumbling Wednesday as Donald Trump gained the lead in the electoral vote count in the presidential election. Dow and S&P futures also plunged. Earlier, investors had appeared persuaded that Hillary Clinton, seen as a more stable choice, would prevail. (AP Photo/Kin Cheung) MANILA BULLETINA man walks past a display of the Hang Seng Index at a bank in Hong Kong Wednesday, Nov. 9, 2016. Asian shares have shed early gains, tumbling Wednesday as Donald Trump gained the lead in the electoral vote count in the presidential election. Dow and S&P futures also plunged. Earlier, investors had appeared persuaded that Hillary Clinton, seen as a more stable choice, would prevail. (AP Photo/Kin Cheung) MANILA BULLETIN

A man walks past a display of the Hang Seng Index at a bank in Hong Kong (AP Photo/Kin Cheung) MANILA BULLETIN File Photo

The pound held on to its gains after Prime Minister Theresa May announced a snap poll for June 8 as she looks to cement a mandate heading into key Brexit talks with her EU counterparts.

The move comes as France prepares for the first round of its presidential elections at the weekend, while Germany is set for a vote this year, both of which could have huge implications for the future of the eurozone.

Added to that, said Greg McKenna, chief market strategist at AxiTrader, was the face-off between the US and North Korea and the cooling of relations between Washington and Moscow over the Syria crisis.

May’s announcement ”has added another layer of uncertainty for traders”, McKenna added. ”It all sounds dire at the moment.”

The news sent the pound surging more than two percent against the dollar, which hammered London stocks the most since last June’s referendum to leave the EU. The FTSE fell 2.5 percent, while the Dow sank 0.6 percent on Wall Street.

By the end of the morning session in Tokyo the Nikkei index was flat.

Hong Kong slipped 0.5 percent, Shanghai sank 1.2 percent, Sydney lost 0.4 percent and Singapore gave up 0.6 percent. There were also losses in Taipei, Manila and Wellington.

Safe haven assets were also holding up as investors fret over the global outlook. Gold is up more than two percent since Donald Trump ordered missile strikes on a Syrian airbase 12 days ago, sparking fears of a possible conflict with Russia, which is backing the Damascus regime.

The yen was also sitting around five-month highs against the dollar.

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