STI hits four-month low amid trade row

Broad-based declines sent the local market to a four-month low with investors increasingly uneasy over US-China trade tensions, which have spilled into the technology space.

Singapore's Straits Times Index (STI), which opened 0.5 per cent down, continued to tread lower across the session, before settling at 3,160.72, down 22.42 points or 0.7 per cent.

Even though the benchmark index has given up much of its gains from the year's rally, it is still up 91.96 points or 3 per cent in 2019.

Global equity markets had hummed along, pricing in mid-year trade resolution, but hopes were dashed when the US increased tariffs on US$200 million of Chinese imports a fortnight back.

The relationship has since gotten edgier, with Huawei Technologies put on the trade blacklist, with the possibility of more Chinese firms following suit.

"With the US-China trade war baring its teeth, it's becoming clear that at the heart of it all is a technology war," a trader told The Business Times.

The base case is still for a resolution to the trade impasse, observers said, but delays are expected.

US Treasury Secretary Steven Mnuchin admitted on Wednesday that it would take at least a month before the US enacts proposed tariffs on US$300 billion in Chinese imports.

This also serves as a signal not to pin too much hope on a resolution anytime soon.

Elsewhere in Asia, markets in Australia, China, Hong Kong, Japan, Malaysia and South Korea closed lower.

India and Indonesia markets posted gains, buoyed by local political developments.

In Singapore, trading volume clocked in at 989.19 million securities or 78 per cent of the daily average in the first four months of 2019.

"The relatively low volumes showed that the market adopted a cautious stance," IG market strategist Pan Jingyi said.

Total turnover came to $1 billion,

This wasjust under the January-to-April daily average.

Across the market, decliners outpaced advancers 292 to 138.

The benchmark index had 26 of its 30 components in the red.

Local tech counters faced steep sell-offs on Thursday, with the US-China tech tussle worrying investors concerned about ramifications on global tech supply chains.

AEM Holdings skidded six cents or 6.5 per cent to end at $0.87.

Hi-P International finished eight cents or 6.6 per cent lower at $1.14 while Venture Corp dropped $0.46 or 3 per cent to $14.97.

Oil-related counters took a double blow from trade issues and increased US inventories.

Rex International fell 0.5 cent or 7.5 per cent 6.2 cents and GSS Energy shed 0.6 cent or 7.8 per cent to 7.1 cents.

Among the bright spots was ISDN Holdings, which advanced one cent or 4.7 per cent to 22.5 cents.

On Wednesday, CGS-CIMB initiated coverage on ISDN with an "add" call and a target price of $0.32, with analyst William Tng expecting the precision and motion-control engineering firm to reap "immense opportunities" from the fourth industrial revolution.

Real estate investment trusts that announced or completed yield accretive property acquisitions this month were also among the local bourse's gainers.

Frasers Centrepoint Trust, which traded at a cum-dividend and cum-offer basis, closed three cents or 1.3 per cent higher at $2.44.

Meanwhile, Manulife US Reit added 0.5 US cent or 0.6 per cent to end at 85.5 US cents.

With sentiment driven largely by any development surrounding the US-China trade relationship, market volatility is likely to show little signs of abating, until a clearer picture emerges.

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