There are numerous factors that have the potential to affect investor sentiment. It was a tough day for stocks in Asia-Pacific as investors monitored the situation regarding Brexit as well as ongoing negotiations in the U.S. for a coronavirus relief package. Let’s have a look at stocks across Asia-Pacific to learn more about the situation.
It is worth noting that, the Nikkei 225 in Japan dropped 0.23% to 26,756.24. At the same time, the Topix index fell 0.18% to 1,776.21.
Also, South Korea’s Kospi index declined 0.33% to 2,746.46 on Thursday.
Australia’s ASX 200 fell 0.67% to 6,683.10, with all sectors finishing in the red. Notably, the energy subindex declined 0.37% as oil stocks struggled for gains.
Importantly, it was a tough day for mainland Chinese stocks. The Shanghai Composite was near flat on Thursday. In the meantime, the Shenzhen Composite added 0.12% to 2,253.43. Also, the Shenzhen Component gained 0.11% to end its trading day at 13,731.34.
Brexit talks and stocks
On Wednesday, a three-hour meeting between the U.K. and European Union leaders ended without significant progress. According to a source from Downing Street, British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed that a firm decision should be made by Sunday regarding the future of the talks.
As a reminder, the U.K. left the European Union in January but the country agreed to keep the same standards and regulations until the end of 2020. Both sides need time to develop new trading arrangements. People should keep in mind that, transition period ends in three weeks and there are serious concerns that they will not reach an agreement by that time.
British Prime Minister had a working dinner with the European Commission President. There are three main issues in the trade talks: fisheries, competition rules as well as arbitration over their potential new deal. Importantly, negotiations failed to solve the issues mentioned above for several months.
Both sides should work together to reach an agreement as soon as possible. Importantly, the Brexit negotiations are particularly difficult, as for the first time in the European Union’s history both parties are looking to diverge from a current set of rules. As a reminder, traditionally new trade deals result in a harmonization of food, labor, and other standards. Both sides should work harder to solve all remaining issues by the end of the year. Leaders should find a solution that will satisfy both sides.