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Markets adjust to lower likelihood of Brexit
THE ongoing suspense over Britain's future in the European Union (EU) has sent the markets into a surreal real-life re-enactment of Monty Python's dead parrot sketch, in which argument swings back and forth over whether the subject at hand is pining for the fjords or has in fact ceased to be.
The forecaster's needle on Friday swung towards a "Remain" outcome for the so-called "Brexit" referendum on June 23.
The Singapore Straits Times Index rose 11.86 points, or 0.43 per cent, to end the week at 2,763.42, while London's FTSE 100 was up 1.24 per cent, or 73.59 points, at 6,024.07 as at 6:30pm Singapore time. In Hong Kong, the Hang Seng rose 0.66 per cent, or 131.56 points, to finish at 20,169.98.
Polls suggested that sentiment may have shifted towards staying in the EU following the overnight killing of British pro-EU member of parliament Jo Cox, by an attacker speculated to have been motivated by a right-wing agenda.
An IG barometer indicated that the broking firm's clients were expecting a 67 per cent chance of remaining in the EU as at late Friday, up from 58 per cent earlier.
News of a temporary suspension of campaigning on Brexit in the UK lifted the Sterling pound to US$1.42, Maybank Kim Eng noted in a report.
Friday's turnabout was a sharp contrast with earlier in the week, when the "Leave" camp seemed to be gaining momentum.
OCBC noted that global equity and bond fund flows registered net redemptions in the week ended June 15, the first time that has happened for both asset classes since December 2015. Funds pulled US$1.1 billion out of emerging Asian equities over the week, the most among emerging markets.
Gold prices hit a 22-month high on Thursday, exceeding US$1,300 per ounce.
Sentiment is expected to remain volatile in the week ahead.
"Global markets are going to be nervous in the coming week," IG market strategist Bernard Aw said. "They are probably not going to pay much attention to other data or events."