February ends with geopolitical tensions
Investors buffeted by various fundamental theme drivers impacting global equities, currency and commodity markets
The last trading day of February certainly left much for investors in Singapore and Asia to ponder on.
US Trade Representative Robert Lighthizer tempered expectations of a US-China trade deal, which affected Wall Street on Wednesday.
This led Okasan Online Securities chief strategist Yoshihiro Ito to say that Mr Lighthizer "poured cold water on the optimistic atmosphere in markets".
India-Pakistan tensions continue to fester, with key powers urging for calm heads to prevail.
To add to that, the US-North Korea summit in Hanoi was cut short due to disagreements over the extent that the US would lift sanctions.
On the abrupt end to talks, US President Donald Trump said: "Sometimes you have to walk, and this was just one of those times."
While Mr Trump did not close the door on future negotiations, a trader whom The Business Times spoke to pointed out that "it clearly shows the US cannot have its way with everything", adding: "China will probably do the same if the US expects too much from them."
Trade and geopolitical factors aside, weak economic data releases from China, Japan and South Korea also suggested that global growth was slowing.
However, IG market strategist Pan Jingyi noted that the market had been quick to brush weak Chinese data aside due to the Chinese New Year break.
In Singapore, these factors contributed to the drop in the Straits Times Index (STI) of 37.33 points or 1.2 per cent to close at 3,212.69. That said, the STI still gained 0.7 per cent or 22.5 points in February.
Elsewhere in Asia, markets were mixed as Australia closed higher while Japan, China, Hong Kong, Malaysia and South Korea closed lower.
Trading on the Singapore bourse clocked in at about 1.38 billion securities worth $1.53 billion in total changing hands. Decliners outnumbered advancers 273 to 166.
Thomson Medical Group was the bourse's most traded counter of the day, adding 0.1 cent or 1.3 per cent to close at eight cents with 85.2 million shares traded.
On Wednesday, it posted a net profit of $2.2 million for FY2018, reversing the net loss of $22.3 million in FY2017.
Among Singapore's blue-chip index constituents, casino operator Genting Singapore was the most heavily traded. It ended Thursday's session two cents or 1.9 per cent lower at $1.02 on 62.1 million shares traded.
Of the 30 STI constituents, two counters (Sats and CapitaLand Commercial Trust) posted gains while five closed flat.
Wednesday's big gainers on the index (the Jardine trio) took a sizeable hit yesterday as Jardine Cycle & Carriage's full-year earnings, which were released after Wednesday's market close, missed street estimates. The counter closed $3.29 or 9 per cent down at $33.34.
By virtue of its 75 per cent stake in Jardine C&C, Jardine Matheson also took a hit, dipping US$2.67 (S$3.60) or 3.8 per cent lower at US$68.56. Jardine Strategic closed US$0.75 or 1.9 per cent lower at US$39.50.
Singapore's bellwether banking shares fared better but still trended lower.
DBS Group Holdings closed $0.31 or 1.2 per cent lower at $24.84; OCBC Bank dropped $0.12 or 1.1 per cent to $11.06; while United Overseas Bank lost $0.19 or 0.8 per cent to end at $25.02.
CMC markets' Margaret Yang attributed the slide to "investors' risk sentiment turning sour across Asia on geopolitical tensions and poorer trade prospects".
For full listings of SGX prices, go to http://btd.sg/BTmkts
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