Asian stock markets trade mixed as UK pound recovers from 30-year lows

The Shanghai Composite Index was marginally down by 0.03% at 2,894.83 as of 5.02am GMT, while other Asian stock market indices were trading mixed on Tuesday (28 June). This followed a recovery in the UK pound and a negative close overnight on the Wall Street and Footsie.

The pound that recently fell to 30-year lows recovered some ground. While it had fallen overnight to $1.3121, its lowest since September 1985, it was up 0.55% at $1.3298 as of 5.06am GMT. This follows US ratings agency Fitch lowering the UK credit rating to "AA" from "AA+". The agency said the outlook on the sovereign rating was "negative", meaning there could be further downgrades.

Investors in the region continued to be concerned over the uncertainty of Brexit and the after-effects it would have on UK and other parts of the world. David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management told Reuters, "Markets already appear to be pricing in a full-blown recession in the UK and rising recession risk in the rest of Europe."

Chris Weston, chief market strategist at IG told CNBC, "The UK referendum has not just left a stain on British politics (and society), but it has unmasked a number of macro concerns that were largely smoothed over in the wake of the coordinated central action in February." European banking sector's solvency, the after-effects of a stronger dollar and the prospect of further depreciation of the yuan, are some of the investor concerns, he said.

Indices in the rest of Asia traded as follows on 28 June at 5.16am GMT:

Overnight (27 June), the Dow Jones Industrial Average closed at 17,140.24, down 1.50%, while the FTSE 100 closed at 5,982.20, down 2.55%.

Among commodities, oil prices were trading mixed. While WTI crude oil was trading 1.05% lower at $48.85 (£36.71, €44.19) a barrel, Brent crude was trading 1.53% higher at $47.88 a barrel at 5.24am GMT.