Asian Stock Decreases When A Shares Storm To Erupt

On Tuesday (June 14th), the Asian stock market, after a sharp fall yesterday, was fully pressurized early, because investors were worried about "Britain's withdrawal from Europe".

But investors' nervousness eased off Monday. They are waiting for another three major central banks' monetary policy meetings. The Federal Reserve, the Bank of Japan and the Bank of England will hold policy meetings this week.

"This is the quietness before the storm," said Alex Wijaya, a senior CMC trader in Singapore.

Although the yen was stable in early trading, the Japanese stock market continued to fall.

The Nikkei index on Monday hit its biggest single day decline in six weeks, to a 2 month low, while the yen went up.

Yen as a hedge asset is usually a target for investors to compete for investment in a big market turbulence.

ICM latest poll data show support

The proportion of respondents was 53%, which was 6 percentage points above that of the respondents who supported the EU.

With the British referendum coming closer to the US in June 23rd, more and more market participants warned of Britain's withdrawal from Europe.

After US President Obama, U.S. Treasury Secretary Jacob Lu recently warned Britain about its possible return to Europe.

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Lu said in an interview with CNN that Britain's stay in the EU is in line with the best interests of Europe, the UK and the world, and is conducive to geopolitical stability.

"If the voting result is in another direction, then I can only see negative economic consequences."

Meanwhile, British Prime Minister Cameron also warned that if the United Kingdom withdrew from the EU, British welfare programs such as pensions and national health services would be cut.

Cameron said he did not want to frighten the people, but to say "cool reality" that Britain will face after leaving Europe.

He is trying to win the support of some voters who are most inclined to vote against Europe, especially the elderly.

European Council president Tusk even said that if the June 23rd referendum result is to quit.

That may be the beginning of the disintegration of European Union and Western political civilization.

In early trading on Tuesday, the yen held a steady 106.01 against the US dollar, which would hurt Japanese exports.

On the other hand, A shares rebounded slightly after a 3.2% drop on Monday.

Investors are waiting for MSCI's decision.

At 15 a.m. Beijing time (Wednesday) 5 a.m., MSCI will announce whether A shares will be included in the emerging market index.

Prior to Goldman Sachs's view, A shares were included in the MSCI opportunity of up to 70%, while the investment bank analyst Kingler Lau estimated that A shares would get a net inflow of $15 billion due to the inclusion of MSCI.

Wijaya said that under a series of uncertain market conditions caused by the referendum in the UK next week, investors are avoiding risky asset investments such as stocks and buying high security yen and gold.

Gold prices rose fourth days on Monday, hitting the highest level in 5 months.