STI slips further amid trade woes

Investor sentiment in Asia soured as trade worries and growth concerns showed no signs of easing after Wall Street returned from the Memorial Day break.

The local market was not spared from the sea of red across the region yesterday with Singapore's Straits Times Index (STI) closing at 3,163.28, down 2.04 points or 0.1 per cent.

Elsewhere in the Asia-Pacific, Australia, China, Hong Kong, Japan and South Korea closed lower.

South Korea's Kospi 200 index fell 1.3 per cent to 2,023.32, its lowest since Jan 4.

The index has lost all gains made this year, the second to do so in Asia.

Malaysia managed to buck the trend, adding 0.6 per cent.

"It was a quiet session for Asia markets.

The region fell mostly in line with Wall Street losses, which extended worries over trade tensions and growth," IG market strategist Pan Jingyi said of yesterday's session.

US equities faced losses in Tuesday's late session as a rally in 10-year Treasuries further inverted a part of the yield curve.

Historically, an inverted curve has served as one of the signals that point to a looming recession. US treasury yields continued to decline across the Asian session, hitting a new low since September 2017.

"Until markets see encouraging signs of both sides securing a trade deal, this negative sentiment and general risk aversion will most likely continue punishing global equity markets," FXTM research analyst Lukman Otunuga said.

A trader told The Business Times that with uncertainty in the market, "there is a possibility that prices could fall further; shorting the market is an option but it's too hard for now to be longing the market".

In Singapore, trading volume clocked in at 1.13 billion securities or 89 per cent of the daily average in the first four months of 2019.

Total turnover came to $1.04 billion, 2 per cent above the January-to-April daily average.

Across the market, decliners outpaced advancers 215 to 153. The benchmark index had 17 of the STI's 30 components trading in the red.

Among them, Genting Singapore was the benchmark index's most traded stock, with 29.1 million shares changing hands.

The casino operator's shares reversed Tuesday's gains to end one cent or 1.1 per cent down at 88 cents.

The local banks were down as well.

DBS Group Holdings ended 11 cents or 0.4 per cent lower at $24.85, OCBC Bank dropped five cents or 0.5 per cent to $10.89 while United Overseas Bank closed at $24.11, down 20 cents or 0.8 per cent.

IG's Ms Pan noted that lower US treasury yields could have been a drag on the local banking sector.

Meanwhile, Singtel shares rebounded, closing at $3.18, three cents or 1 per cent higher. StarHub shares were unchanged at $1.49.

The telcos were down on Tuesday after recently privatised M1 revealed that it will replace 19 mobile plans with one base plan each for SIM-only and handset bundles.

DBS Equity research analyst Sachin Mittal said in a report yesterday that M1's move is likely to have minimal impact on Singtel's earnings "as Singapore mobile accounts for less than 10 per cent of Singtel's bottom line".

Oil prices slumped on trade and growth fears, which impacted some of the smaller oil and gas players.

Rex International shares dropped 0.4 cent or 6.5 per cent to 5.8 cents, and GSS Energy fell 0.2 cent or 2.8 per cent to seven cents.

Investors also turned to shoring up defensive stocks, with Sheng Siong adding two cents or 1.9 per cent to $1.10 and ST Engineering edging up one cent or 0.3 per cent to $3.91.

For full listings of SGX prices, go to https://www2.sgx.com