While equity markets have bounced, there is a lot of uncertainty about the state of the global economy (Daniel ROLAND)

Hong Kong (AFP) – Asian markets staged a tentative recovery Tuesday from the previous day’s steep losses, with investors increasingly anxious about the state of the global economy.

With a mixed lead from Wall Street, regional traders had few catalysts to drive buying, while safe-haven flows saw the dollar edge up against high-yielding currencies.

Attention is also back on London, where MPs essentially wrested control of the Brexit debate from Prime Minister Theresa May with a vote that will allow them to decide on a number of possibilities for how to proceed.

Investors in Asia were suffering a hangover from Monday’s pummelling, which came on the back of a drop in benchmark 10-year Treasury bond yields below those for three-month bills — for the first time since before the global financial crisis.

This so-called inverted yield curve shows investors are more willing to buy long-term debt — usually viewed as a higher risk — as they consider the short-term outlook more hazardous. Such a scenario has preceded several recessions in recent decades.

“Recession worries may be premature for the US, but the negative signals are consistent with the recent data,” said OANDA senior market analyst Edward Moya.

– May’s fresh crisis –

Tokyo led gains, jumping 1.8 percent by the break — having dived three percent Monday — while Hong Kong edged up 0.4 percent and Shanghai was flat.

Sydney added 0.1 percent, Singapore put on 0.7 percent, while Seoul, Wellington, Taipei and Manila also rose.

In Britain, the Brexit saga took a new twist when lawmakers inflicted yet another defeat on May by voting to take control of parliamentary business that will see them hold a series of ballots on different options for leaving the EU.

They will now choose to revoke Article 50 and cancel Brexit, hold another referendum, vote for a deal including a customs union and single market membership, or leave the EU without a deal.

However, even if they decide a majority course of action, the government is not legally bound to follow their instructions.

The move came after the premier admitted she still had not secured the votes needed to get her Brexit deal through parliament.

EU leaders last week delayed the divorce but warned that unless May can push her withdrawal deal through, Britain must come up with a new plan by April 12 — or leave its closest trading partner with no deal at all.

While uncertainty reigns, the sterling was slightly higher Tuesday, with investors still hopeful Britain will avoid a no-deal Brexit, which some warn could be an economic calamity for the country.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 1.8 percent at 21,362.60 (break)

Hong Kong – Hang Seng: UP 0.4 percent at 28,625.95

Shanghai – Composite: FLAT at 3,043.14

Pound/dollar: UP at $1.3202 from $1.3198 at 2100 GMT

Euro/dollar: UP at $1.1316 from $1.1313

Dollar/yen: UP at 110.08 yen from 109.96 yen

Oil – West Texas Intermediate: UP 45 cents at $59.27 per barrel

Oil – Brent Crude: UP 22 cents at $67.43 per barrel

New York – DOW: UP 0.1 percent at 25,516.83 (close)

London – FTSE 100: DOWN 0.4 percent at 7,177.58 (close)

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