The Australian share market has regained some of Friday’s big losses caused by Britain’s exit from the European Union, but market observers still think there’s more carnage to come from “Brexit”.
IG market strategist Evan Lucas said Monday’s modest bounceback did not mean that investors were no longer worried about the uncertainty caused by Brexit.
Mr Lucas said investors were waiting to see how European markets perform overnight after the UK’s weekend soul-searching.
The British futures index was suggesting a substantial fall, with France and Germany likely to follow.
Also, the British pound continued to lose value, and there appeared to be a lack of clear leadership from either of the major British political parties on how they will deal with the UK’s exit from the European Union.
“Although Asia has escaped it (a fall on Monday), I think we may wake up tomorrow and fall out of bed,” Mr Lucas said.
“I think tomorrow could be the day that we see it (another slide) rather than today.”
Mr Lucas said stocks with exposure to Britain or even the rest of Europe were still hit hard on the Australian market today.
Clydesdale Bank fell 43 cents, or 9.41 per cent, to $4.14 cents; Henderson Group lost 71 cents, or 15.92 per cent, to $3.75; Magellan Financial Group dumped $1.24, or 5.37 per cent, to $21.83; and BT Investment Management erased 89 cents, or 10.22 per cent, to $7.82.
Other stocks that had more exposure to Asia followed Asian markets upwards, and mining stocks benefited from a lift in iron ore futures.
In the resources sector, global miner BHP Billiton lifted 54 cents to $18.08. BHP Billiton said on Monday it would boost exploration expenditure next financial year and target opportunities across copper and oil sectors.
Rio Tinto gained $1.24 to $44.07, and Fortescue Metals ascended 26 cents to $3.53.
Goldminer Newcrest climbed 64 cents to $24.19 on the back of higher gold prices.
Among the major banks, ANZ lost 17 cents to $23.27, National Australia Bank retreated 10 cents to $24.51, Commonwealth Bank found 23 cents at $72.80, and Westpac put on four cents to $28.38.
Insurance giant QBE slid 74 cents, or 6.75 per cent, to $10.23 after it said any changes to “passporting” rules around European premiums could force it to renew business in new entities.
KEY FACTS:
* At 1624 AEST on Monday, the benchmark S&P/ASX200 index was up 24 points, or 0.47 per cent, at 5,137.2 points.
* The broader All Ordinaries index was up 23.4 points, or 0.45 per cent, at 5,216.2 points.
* The September share price index futures contract was up two points at 5,073 points, with 38,569 contracts traded, according to preliminary calculations.
* National turnover was 2.8 billion securities traded, worth $6.3 billion.
