Wall Street opens lower on Brexit hangover, China stocks rebound

Global Business

A statue of Winston Churchill is silhouetted against the Houses of Parliament in London, Friday morning, June 24, 2016. (AP Photo/Matt Dunham)

Wall Street opened sharply lower on Monday, led by financial stocks, as investors tread cautiously after the Brexit vote damaged confidence and sparked a massive equities selloff. Meanwhile China stocks, led by small-caps, rebounded as investors in them shrugged off Britain’s decision to leave the European Union.

“We think that things will stabilize once you get past the initial shock, and it will be a pretty bumpy process in terms of figuring out what the future is for the U.K. and the euro zone,” Michelle Meyer, an economist at Bank of America Merrill Lynch, said. “But obviously if that worst case scenario were to come through, and you have a pretty significant sell-off in global financial markets, then that will impact somebody who’s going to be invested in the markets.

The Dow Jones industrial average was down 141.52 points, or 0.81 percent, at 17,259.23, the S&P 500 15.22 points, or 0.75 percent, at 2,022.19 and the Nasdaq Composite 43.33 points, or 0.92 percent, at 4,664.65.

“Brexit’s direct impact to China is limited, as China’s capital market is not fully open yet,” said Wu Kan, head of equity trading at Shanghai-based investment firm Shanshan Finance.

Lou Jiwei, China’s minister of finance, said at a meeting on Sunday that the repercussions and fallout from Brexit are “difficult to predict now. The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view.”

On Monday, all main sectors rose in China, with Shenzhen’s start-up board ChiNext up 1.8 percent and consumer shares jumping nearly 3 percent.

Compiled from Reuters wire reports.