Asian markets slide ahead of key global events

An investor looks at an electronic board showing stock information at a brokerage house in Beijing, China, on June 24, 2016.
An investor looks at an electronic board showing stock information at a brokerage house in Beijing, China, on June 24, 2016.PHOTO: REUTERS

HONG KONG (AFP) - Traders tread water in Asia on Wednesday (Jun 7) as they nervously await a string of major events that could either hammer global markets or fuel a rally.

Thursday sees Britain voting in a general election, the European Central Bank's (ECB) policy meeting and - potentially the biggest market mover - sacked Federal Bureau of Investigation boss James Comey testifying to Congress on US President Donald Trump's possible campaign links to Russia.

Adding to the sense of unease is a brewing crisis in the Middle East, where Saudi Arabia, the United Arab Emirates and Egypt cut off ties and transport links to Qatar - citing its alleged support for extremism.

Singapore shares ended a little lower over the nervousness with The Straits Times Index closing 0.16 per cent or 5.26 points lower at 3,230.49, weighed down by Singtel, Jardine Matheson Holdings, Wilmar International and two of the local banks.

"We have the key UK (election) vote, the European Central Bank meet and James Comey's testimony to the Senate which has most investors keeping to the sidelines," a dealer said.

On equity markets, Tokyo's Nikkei ended flat, while Seoul and Wellington each slipped 0.4 per cent. Hong Kong fell 0.1 per cent and Sydney barely moved following data showing Australia's economic growth slowed sharply in the first quarter.

But Shanghai jumped 1.2 per cent as traders welcomed a further strengthening of the yuan, which has jumped more than 3 per cent since the start of the year, when it had been wallowing around eight-year lows. Manila and Jakarta were slightly higher.

On currency markets, the pound edged up against the US dollar ahead of the British vote.

The sterling has come under pressure in the past few weeks as Prime Minister Theresa May's ruling Conservatives have seen their once-commanding lead almost wiped out by Mr Jeremy Corbyn's opposition Labour Party, raising worries about uncertainty just weeks ahead of Brexit negotiations.

The euro also remains in good health following a string of positive indicators out of the euro zone, led by Germany, and expectations the ECB will start to tighten monetary policy soon - possibly on Thursday.