The volatility perpetuated by United States President Donald Trump is back and this time Asian markets seem to be torn as to how worried they should really be.

Following Wall Street's weekend tumble after Mr Trump's former top aide Michael Flynn pleaded guilty to lying to the Federal Bureau of Investigation, indices bounced back soon after the massive tax cut went through the Senate.

But this recovery failed to spill over to the benchmark Straits Times Index (STI) yesterday, even as the Dow futures were up 200 points in the afternoon.

Perhaps a sign that the markets needed time to digest the events, the STI closed lower by 11.07 points or 0.32 per cent at 3,438.47.

CMC Markets' Margaret Yang said in a note that the US tax reform will reduce corporate tax rate to 20 per cent in 2019 from 35 per cent. And, unlike the individual provisions, the change would be permanent. "A generous tax cut would potentially result in as much as US$1.3 trillion (S$1.7 trillion) fiscal deficits in the years to come, but markets tend to enjoy the near-term rally without bothering about what's going to happen a decade from now," Ms Yang said.

The STI was dragged down by financial and industrial stocks such as United Overseas Bank, OCBC Bank, the Jardine group of companies and Singapore Airlines, which contributed a combined loss of 19 points, even as shares of Singtel, Genting Singapore, City Developments and DBS Group helped recover some lost ground.

Singtel ended at $3.75, up one cent, after the telco and bike-sharing firm Mobike agreed to collaborate in areas such as mobile payments and the use of Internet of Things technology.