Most of the Asian equity benchmarks are trading lower in the early deals on Tuesday amid worries about the global economic outlook following Britain's decision to leave the European Union. In the absence of fresh cues from Wall Street, investors tracked the overnight lead from European markets, which snapped a four-day rally and closed lower overnight. Japan's Nikkei share average declined, snapping a six-day winning streak after a stronger yen triggered profit taking, while banking stocks underperformed on fears of counterparty risks following a drop in European banks. However, shares in China bucked a slump across Asia, as Chinese investors became more hopeful about President Xi Jinping’s calls for state-owned enterprise reform. A private survey of small and medium companies in China showed activity in the services sector grew at a quicker pace in June. The Caixin Purchasing Managers' Index (PMI) for June was at 52.7, compared with 51.2 in May, marking the fastest increase in 11 months. Levels above 50 indicate expansion. Among the other Asian markets, South Korea, Hong Kong, Taiwan, Singapore, and Malaysia are lower and Markets in Indonesia are closed all week for the Eid al-Fitr holiday.
Nikkei 225 dropped 139.86 points or 0.89% to 15,635.94, Hang Seng contracted 173.36 points or 0.82% to 20,885.84, Straits Times dipped 2.35 points or 0.08% to 2,868.21, KOSPI Index slipped 6.49 points or 0.33% to 1,988.81, FTSE Bursa Malaysia KLCI decreased 4.13 points or 0.25% to 1,650.71, and Taiwan Weighted was down by 37.21 points or 0.42% to 8,723.37.
On the flip side, Shanghai Composite was up by 12.06 points or 0.40% to 3,000.66.