Asian markets were struggling to shrug off some of the Brexit gloom on Tuesday.
Hong Kong’s Hang Seng dropped 0.8%, while Australian stocks shed 0.6%. But the Nikkei in Tokyo clambered into positive territory, posting a 0.6% gain after earlier falling as much as 1.9%.
British voters’ decision to leave the EU in a referendum last week has sent shock waves through financial markets, wiping out trillions of dollars in value. The extreme uncertainty about how the unprecedented situation will play out has left investors trying to figure out how to position themselves.
“We’re still in the early days,” said Andrew Sullivan, managing director of sales trading at Haitong International Securities in Hong Kong. “It’s going to take some time to dampen out these oscillations.”
Stocks seen as having strong exposure to the U.K. again bore the brunt of selling.
Nomura, a Japanese investment bank with significant operations in London, fell 1.7%, while CK Hutchison, a Hong Kong-listed company that owns a range of U.K. businesses, sank 2.6%.
The moves in Asia followed a brutal day of trading in Europe and the U.S. on Monday. The Dow slumped 261 points to the lowest level in over three months. Benchmark indexes in London, Paris and Frankfurt lost 2.5% to 3%. Ireland, a major trading partner of the U.K., saw its stock market plummet by 9.5%.
The pound, meanwhile, hit a fresh low of below $1.32 on Monday, its weakest level in more than three decades. But early Tuesday, it recovered a bit of ground to trade around $1.33.
In another sign of a little more optimism, crude oil rose 1.6% to above $47 a barrel. U.S. stock futures also looked more hopeful, with the Dow projected to open up more than 100 points.
Fragile market sentiment wasn’t helped Monday, though, by Standard & Poor’s two-notch downgrade of Britain. S&P specifically cited the Brexit vote, warning it will hurt the U.K. economy, deter investment and make it harder to finance the country’s large debt load.