Asian markets keep their cool amid political news from Europe, US; STI ends higher

Men look at an electronic board showing stock market information at a brokerage house in Beijing, China on Jan 5, 2016.
Men look at an electronic board showing stock market information at a brokerage house in Beijing, China on Jan 5, 2016.PHOTO: REUTERS

SINGAPORE - Asian stock markets shrugged off a triple whammy of political news from Europe and the United States, ending the day with no dramatic moves either up or down.

It looked set to be a volatile day in financial markets as the news unfolded.

British elections resulted in a hung parliament, the former director of the United States' Federal Bureau of Investigations, Mr James Comey, accused the President and White House of lying and the European Central Bank in its latest economic forecast removed language suggesting more interest rate cuts could come, in a sign that it is moving closer towards a withdrawal of stimulus for the euro zone.

Yet, regional markets kept their cool, with Singapore's benchmark Straits Times Index rising 17.14 points, or 0.53 per cent, to 3,254.19.

Tokyo gained 0.52 per cent, Seoul rose 0.77 per cent and Shanghai edged uo 0.26 per cent. Hong Kong fell a slight 0.13 per cent.

Mr Rohit Arora, an Asian emerging markets strategist at UBS Group in Singapore told Bloomberg that the stock markets are being led more by economic data than geopolitical news.

"Our work indicates that the volatility profiles of asset markets and macro data are intimately linked. For the best part of 2017, we have seen macroeconomic data strengthening. This has kept the volatility low and contagion risks contained," he said.

StarHub dropped three cents to S$2.71, after OCBC Investment Research yesterday reiterated its "sell" call on the stock.

The telco recently announced an agreement to acquire a 51 per cent stake in cybersecurity firm Accel Systems & Technologies for S$19.4 million.

Rival SingTel lost two cents to S$3.74 while M1 added a cent to S$2.25.