Worst session in 3 weeks for STI, Latest Business News - The New Paper

Worst session in 3 weeks for STI

This article is more than 12 months old

Index drops nearly 1% as increased political turmoil in the US and trade tensions rattle investors

Singapore stocks had their worst session in three weeks yesterday, as increased political turmoil in the US and trade tensions rattled investors.

The Straits Times Index (STI) slumped 0.6 per cent at the open before slipping further to close at 3,125.82, down 0.94 per cent or 29.64 points.

"The benchmark STI has been drifting in ebbs and flows off foreign news this week, with overall sentiment leaning towards cautious mode," said Ms Margaret Yang, an analyst at CMC Markets in Singapore.

Developments in the US-China trade negotiations, US President Donald Trump's impeachment inquiry and a softening global growth outlook are going to dominate trading for the rest of the week, Ms Yang added.

Other Asian markets also fell, with South Korea's Kospi shedding 1.32 per cent and the Nikkei 225 in Japan 0.36 per cent.

The MSCI Asia ex-Japan index traded 0.9 per cent lower.

Overnight, US lawmakers launched an impeachment inquiry into Mr Trump, adding to the trade worries weighing on investors' minds.

In addition, the US leader said at the sidelines of the United Nations General Assembly that he will not accept a "bad deal" with Beijing, ahead of planned talks between the two largest economies of the world.

"If an impeachment enquiry looks like it will end his (Donald Trump's) re-election chances in 2020, he may throw caution to the wind and harden his attitude to a China trade deal, increasing the chances of a global recession next year," said Mr Jeffrey Halley, senior market analyst, Asia-Pacific, at Oanda.

Yesterday, losers outnumbered gainers 256 to 132 on the local bourse, or two down for every one on higher ground. Total turnover was $967.82 million, with 989.81 million shares changing hands.

Industrial and financial stocks dominated losses, with conglomerate Jardine Matheson Holdings sliding 0.96 per cent or US$0.53 to US$54.67 and Jardine Cycle & Carriage slumping 2.1 per cent or $0.65 to $30.30.

Jardine C&C's extended slide - shares have fallen for the past five days - comes despite the group's outgoing managing director Alex Newbigging telling The Business Times that he is optimistic about Indonesia's automotive industry and sees "a lot of growth to come".

Singapore's largest lender DBS Group dropped 1.24 per cent or $0.31 to close at $24.73. OCBC Bank fell 1.28 per cent or $0.14 to $10.77, while United Overseas Bank finished at $25.38 on Wednesday, shedding 0.7 per cent or $0.18.

Declines also came from mainboard-listed Sevak and Mirach Energy, which is currently on the exchange's watch-list. Shares of telecommunications services provider Sevak hit $2.64, down 8.97 per cent or $0.26 on day.

Meanwhile, Mirach's share price plunged 23.91 per cent or $0.044 to $0.14 after Singapore Exchange Regulation urged investors and potential investors to exercise caution when dealing in the shares.

The regulator had found that a small group of individuals was responsible for nearly 70 per cent of the buy volume of the stock over a nearly seven-month period.

Much of the bourse's activity yesterday continued to be driven by Yangzijiang Shipbuilding and Golden Agri-Resources.

The Chinese shipbuilder closed down 4.37 per cent or $0.045 at $0.985, on trade of over 46 million shares. Golden Agri-Resources fared no better, tumbling 4.08 per cent or $0.01 to $0.235, as close to 26 million of its shares changed hands.

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