TOKYO/SINGAPORE: Asian stocks slipped, after the biggest three-day drop since February, amid investor anxiety before central bank meetings and Britain’s vote on European Union membership. Australian shares led declines as trading resumed after a holiday.
The MSCI Asia Pacific Index declined 0.2 percent to 127.17 as of 9:13 a.m. in Tokyo. The gauge tumbled 3.7 percent in the past three days amid mounting anxiety the U.K. will vote to leave the EU on June 23, with a survey by the Independent newspaper showing 55 percent of voters favoring a so-called Brexit. Investors are also cautious ahead of this week’s policy decisions from the Federal Reserve and the Bank of Japan.
“The market is trying to price in Brexit and as a result there’s a flight to safety,” Kelvin Tay, regional chief investment officer at UBS Group AG’s wealth management business in Singapore, said by phone. “We’re now moving into a crucial period before the vote itself. Things are just going to get volatile from here on.”
The equity selloff began at the end of last week, with the MSCI All-Country World Index sinking 1.4 percent on Friday after the Brexit poll result was published. Volatility gauges have surged since then, with the Chicago Board Options Exchange Volatility Index and Nikkei Stock Average Volatility Index jumping more than 20 percent on Monday.
Japan’s Topix index fluctuated as the yen held Monday’s gain. The stock gauge plunged 3.5 percent on Monday, its biggest drop since February. South Korea’s Kospi index was little changed. New Zealand’s S&P/NZX 50 Index slid 0.6 percent. Australia’s S&P/ASX 200 Index, which was closed on Monday, declined 1.5 percent.
Futures point to a further weakness for China and Hong Kong stock markets, with contracts on the FTSE China A50 Index sliding 0.1 percent in their most recent trading, while those on the Hang Seng Index fell 0.4 percent.
The Shanghai Composite Index sank 3.2 percent on Monday and the Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong extended its two-day slump to 4.5 percent, the most since February.
The losses come before MSCI Inc.’s decision on whether to add yuan-denominated shares to its global indexes. The Shanghai gauge has dropped 20 percent this year and is among the world’s worst-performing equity benchmarks.
Futures on the S&P 500 Index declined 0.1 percent. The U.S. equity benchmark index slipped 0.8 percent to close at a three-week low on Monday, with raw-material producers, industrial and technology shares falling the most.
West Texas Intermediate crude for July delivery fell 1.1 percent in early Asian trading, heading for its fourth day of decline.
