Local bourse subdued after London attack

This article is more than 12 months old

STI falls 1.7 points to 3,238.31 in tandem with weakness in other Asian markets ahead of event-packed week

Trading in the local bourse was limp yesterday following the weekend's terror attack in London, escalating rifts in the Gulf region and ahead of an event-packed week in terms of macro data and politics.

Singapore's key Straits Times Index fell 1.7 points, or 0.05 per cent, to finish the day at 3,238.31, snapping three straight days of gains.

Elsewhere, other key Asian bourses had a weak showing with Japan's Nikkei 225 flat after retreating 0.03 per cent, Hong Kong's Hang Seng down 0.2 per cent and China's Shanghai Composite losing 0.5 per cent.

Britain suffered another terrorist attack over the weekend, just days before its general election this Thursday, where uncertainty looms as opinion polls have tightened to an unexpected degree.

Fanning market jitters was news that four Arab nations have cut ties with Qatar in relation to a dispute over Doha's relations with Iran and support for Islamist groups. The news sent oil prices soaring.

These concerns outweighed the upbeat close on Wall Street last Friday that saw the US' three major stock indices scale fresh highs for the second consecutive session.

Latest data showed that activity in China's services sector expanded at the fastest pace in four months in May, which somewhat offset anxieties over weaknesses in the world's second largest economy.

"Yes, the global economy is reasonably healthy. But the momentum is generally easing," according to a note by DBS Chief Investment Office. "Asset markets are about pricing and expectations. The pricing is pretty 'rich' and expectations are high. Meanwhile, policy and political uncertainties are likely to return."

Citi Research raised its global growth forecasts for 2017 and 2018 to 3.0 and 3.3 per cent respectively mainly driven by revisions to the euro area and Mena (Middle East and North Africa), although it added that its "central scenario" for the world's growth outlook remains "benign" with rising downside risks.

The house's chief concerns were the apparent policy tightening in China and political risks that threaten economic reforms, particularly in the US and Brazil. The US was due to report durable goods orders, factory orders and non-manufacturing ISM yesterday.

On the home front, some 1.5 billion shares worth $958 million were done versus last Friday's 1.9 billion shares worth just over $1 billion. Losers outpaced gainers with 221 counters up and 225 counters down.

The FTSE ST Mid Cap Index slipped 0.13 per cent, while the FTSE ST Small Cap Index rose 0.27 per cent. UOB led the losses shedding 17 Singapore cents, or 0.7 per cent, to $23.18.

The other two banking stocks clicked higher with DBS inching up one Singapore cent to $20.49 and OCBC up three Singapore cents at $10.61.

Singtel fell one Singapore cent, or 0.3 per cent, to $3.80, and CapitaLand lost two Singapore cents, or 0.6 per cent, to $3.60. City Developments Ltd fell seven Singapore cents, or 0.6 per cent, to S$10.74.

OCBC Investment Research said it maintains its "buy" rating on the property sector, with CapitaLand one of its top picks. Based on its channel checks, the research house said buyer sentiment appears to have improved after the latest tweaks to the property curbs in March, which will be supportive of the physical market.

Jardine Matheson Holdings jumped 69 US cents, or 1 per cent, to US$65.89.

Mandarin Oriental International, a member of Jardine Matheson Group, said yesterday that it will "test market interest in the possible sale" of The Excelsior in Hong Kong.

This article appears in The Business Times today. For full listings of SGX prices, go to

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