Asian stocks in December less ugly than in US

AN air of calm has descended on Asian stock markets. The regional benchmark index rose a mere 0.3 percent as of 5:04 p.m. in Hong Kong on Wednesday, with markets mixed across the region. To boot, trading volume slumped in the last full trading week of the year. And, news that China and the United States held vice ministerial level talks on Wednesday to discuss the ongoing trade dispute didn’t move the needle much.

After the tumultuous on Tuesday where major indexes sank, investors stayed on the sidelines while awaiting the conclusion of the Federal Reserve’s rate decision. Here’s a look at how Asian stocks have done so far this month:

The MSCI Asia Pacific Index declined 3.7 percent as of Tuesday, much less than the 7.8-percent plunge in the US. While Asia wiped out $563 billion of value this month, that’s only 16 percent of the market cap lost globally. More than $2.2 trillion evaporated from US stocks. In terms of valuations, the gap between Asian and US equities has narrowed significantly from a record earlier this year.

Why hasn’t it been as ugly as the US carnage? It could be that the region bore the brunt of a sell-off earlier this year as trade tensions intensified, sending several major markets into correction and bear-market territories way ahead of the turmoil stateside. To Margaret Yang Yan, an analyst at CMC Markets Singapore, the downside for Asian equities is likely to be protected by relatively low valuations, according to a note published on Tuesday.

In some sense, though, Asian markets have been calmer. Intraday swings in the MSCI Asia Pacific Index have averaged 0.9 percent this year. While that’s higher than 0.6 percent in 2017, it’s less than in 2016 and less than the mean moves of 1.1 percent for the S&P 500, which is on track to post its biggest swings since 2011. That hasn’t gone unnoticed, and Treasury Secretary Steven Mnuchin blamed stock volatility partly on high-speed trading and the effect of the Volcker Rule during a Bloomberg interview on Tuesday. Bloomberg News