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June 25, 2016

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Home » Business » Finance

Shares fall after UK’s decision to leave EU

By Leng Cheng | June 25, 2016, Saturday | Print Edition

SHANGHAI shares fell yesterday after the UK voted to exit the European Union, joining a global market turmoil over the referendum result, but shares of gold producers rose as the precious metal is seen as a safe haven.

The Shanghai Composite Index lost 1.3 percent to close at 2,854 points, with financial shares declining. The gauge dived 2.91 percent after the results of the referendum were known, but rebounded quickly when national funds stepped into the market, traders said.

“There’s been some panic,” said Jackson Wong, associate director at Huarong International Securities, who received sell orders from concerned investors. Many of his clients had previously priced in a “Remain” vote, but the mood soured as the results started to show a likely victory for the Brexit camp.

Gold miners bucked the general decline in the Shanghai market as investors made a beeline for the metal seen as a safe bet.

Shangdong Gold Mining Co surged by the 10 percent daily limit to 38.79 yuan (US$5.86), while Zhongjin Gold Corp rose 9.9 percent to 11.58 yuan.

In Hong Kong, the Hang Seng Index lost 2.9 percent to close at 20,259.13 points, posting its biggest decline since February 11. The gauge sank as much as 5.8 percent in the afternoon session as shares were sensitive to what happens in the British economy.

HSBC Holdings, which gets a third of its revenues from Europe and has the second-largest weighting in the Hong Kong benchmark index, shed 6.59 percent to HK$47.45 (US$6.12). London-based Standard Chartered saw its biggest slump in almost four years.

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