Hong Kong stocks tumbled in the first few minutes of trade Monday, extending the sharp losses at the end of last week as traders are spooked by the uncertainty caused by Britain’s decision to leave the European Union.
The Hang Seng Index fell 1.36 percent, or 276.47 points, to 19,982.66.
And the benchmark Shanghai Composite Index gave up 0.48 percent, or 13.73 points, to 2,840.56, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, slipped 0.67 percent, or 12.68 points, to 1,887.92.
Meanwhile, the pound sank Monday to sit at 30-year lows.
Sterling plunged two percent in early exchanges as dealers rushed into assets considered safe, such as the yen and gold, although Japan’s Nikkei stock index rallied after suffering a battering on Friday.
The surprise decision wiped USD2.1 trillion off market valuations Friday and sent the pound slumping to a 31-year low against the dollar.
But while it recovered marginally as Friday wore on – helped by promises of financial market support from major central banks – the pound resumed its losses in early Asian business.
It bought USD1.3368, down from USD1.3670 in New York and heading back towards the USD1.3229 touched Friday, which was its lowest level since 1985.
“People are finding it difficult to comprehend what Brexit implies for the future – we don’t know yet what the magnitude of the shock will be,” Steven Barrow, head of Group-of-10 strategy at Standard Bank Group in London, told Bloomberg News.
Investors were also shifting out of other higher-yielding, riskier currencies, which took a hammering last week.
South Korea’s won fell 0.6 percent, the Australian dollar slipped 0.7 percent and the Indonesian rupiah shed 1.1 percent. Malaysia’s ringgit dived 0.8 percent and the Philippine peso one percent.
The Nikkei stock index in Tokyo was up 1.5 percent in mid-morning trade – having plunged nearly eight percent Friday.
Seoul was one percent lower and Wellington 0.5 percent off. There were also losses in Singapore and Taipei. Sydney was flat.
There are fears the shock vote will usher in another rout on global markets just months after a China-fuelled sell-off that scythed through the value of shares at the start of the year.
James Audiss, senior investment adviser at Shaw and Partners in Sydney, warned the week could see some sharp losses across markets.
“It’s going to be a very tough week. Unless an investor has a really strong view one way or the other, you’d be brave to buy in. It will be a really volatile week and people are scared to position into things.”
Investors will be closely watching events in Britain over the next few weeks after Prime Minister David Cameron said he will step down in the autumn, while the leader of the opposition Labour Party is also facing calls to resign.
Finance minister George Osborne, who has been silent since the result, will try to reassure markets, with growing fears Scotland will hold another vote on whether to leave the United Kingdom.
EU leaders have called for a quick break as they look to prevent eurosceptics in other member states from calling referendums that could imperil the six-decades-old alliance.
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