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Asian markets mixed on uncertain outlook

This article is more than 12 months old

Straits Times Index falls 15 points to 2,966, with all but 8 of the 30 constituents closing lower

Asian markets continued to trade mixed in a see-saw session yesterday, swayed by changing sentiment on the US-China trade spat.

A Bloomberg report revealed that the US would put tariffs on all Chinese imports if November talks with Chinese President Xi Jinping don't bear fruit, sending Asian indices into the red in early trading.

But US President Donald Trump contradicted the earlier report, saying in a Fox News interview that the US could get a "great" deal on trade with China, erasing early losses in many Asian markets.

Last week's sell-offs appear to be temporarily stemmed as Chinese regulators moved again to introduce measures to stabilise its markets, this time by way of encouraging share buybacks, mergers and acquisitions by listed firms. The measures sent the Shanghai Composite closing 1 per cent up.

"Frequent verbal intervention by Chinese authorities showed high-level officers are concerned about the recent stock market rout and they will carry out necessary measures to stop this from escalating into systematic financial crisis," CMC market analyst Margaret Yang said.

However, the Chinese yuan hit a fresh 10-year low against the US dollar. FXTM's chief market strategist Hussein Sayed said: "The rally in Chinese equities today may reverse if the currency breaks the key psychological level of 7, so a close eye should be kept on the currency's next move."

The Nikkei closed higher thanks to a dip in the yen against the US dollar. The ASX 200, Kospi and the Kuala Lumpur Composite also finished up. However, the Hang Seng closed 0.9 per cent lower at 24,585.53, a low since early May 2017.

Joining it in negative territory was Singapore's Straits Times Index, which registered a 15.09 point or 0.5 per cent dip to 2,966.45 with all but 8 of the 30 constituents closing lower.

Turnover on the bourse stood at roughly 1.93 billion shares worth $985 million, which worked out to an average unit price of $0.51 per share. Decliners greatly outnumbered advancers 266 to 132.

Ms Yang said: "Sentiment remains fragile on unclear trade outlook, and investors are waiting for big corporate results from OCBC, Sembcorp Industries, DBS and Venture this and early next week to paint a clearer fundamental picture."

On a turnover of 34.6 million shares, Genting Singapore was the bourse's most hotly traded stock, falling $0.015 or 1.7 per cent to close at $0.86 on the day.

The STI's biggest loser - electronics manufacturing services provider Venture Corp - slipped 4.4 per cent or $0.68 to close at $14.65, a new 52-week low.

ComfortDelGro closed $0.02 or 0.9 per cent down at $2.22. Its shares had faced a sharp sell-off on Oct 10 following news that ride-hailing operator Go-Jek won't partner the taxi operator in the Singapore market as initially expected.

In a morning note, KGI Securities said: "We are of the view that the sell-off is overdone and presents an attractive entry point for a defensive business offering."

Commodities trader Noble Group closed $0.003 or 3.5 per cent down at $0.083 after issuing a profit guidance after trading hours on Monday that it expects to report a Q3 net loss in the range of US$90-115 million.

It was a mixed day for financials. DBS closed 1 per cent or $0.23 lower at $22.80, UOB fell 0.6 per cent or $0.15 to end the day at $24, but OCBC gained 0.8 per cent or $0.08 to $10.50.

DBS Group Research downgraded its Singapore dollar (SGD) forecast last Friday as its analysts said the currency was "too strong" relative to external and domestic factors and believe the USD/SGD will rise to 1.40 by the end of 2018 and stay above that level into 2019.

For full listings of SGX prices, go to http://btd.sg/BTmkts