Caution reigns as STI ends lower

Thin volumes and cautious anticipation of key end-of-week central bankers' speeches created a stock market yesterday that was both up and down, nowhere and everywhere.

The Straits Times Index (STI) opened higher in a continuation of Tuesday's rally.

But the STI lost ground over the day, eventually finishing down 0.11 per cent, or 3.74 points, to close at 3,260.05.

But while the blue chips that make up the STI may have had a tough day, the rest of the market fared better.

In fact, gainers outnumbered losers 246 to 149, which meant that five stocks enjoyed a positive session for every three that fell.

That heterogeneity reflects a lack of market-wide consensus on what lies ahead, according to CMC market analyst Margaret Yang.

"Individual stocks are diverging . . . There's not much catalyst in the market," she said.

A total of 1.8 billion shares changed hands, about 77 per cent of the average daily volume in the first seven months of the year.

Turnover was $1 billion, or about 84 per cent of the January-to-July average daily traded value.

Market activity faced headwinds from Hong Kong, which shut down trading for the day as Typhoon Hato made landfall in China.

But investors were already in a subdued state of mind with the US Federal Reserve's Jackson Hole meeting taking place this week.

Fed chair Janet Yellen and European Central Bank president Mario Draghi are expected to give speeches tomorrow, New York time, and investors are waiting to hear from the central bankers before making their moves, Ms Yang said. "Now, a lot of traders are choosing to stay on the sidelines waiting for Jackson Hole.

"There might be a risk-off sentiment ahead of the central bank governors' meeting."

Current events might nudge the market one way or the other - news that US President Donald Trump is working on tax reform was welcomed by US markets overnight, for instance - especially with the high level of uncertainty coming from the White House these days, Ms Yang said.

Still, Jackson Hole will probably reassert itself for the rest of the week. "I think it will be range-bound," Ms Yang said.

Without broad trends to drive prices, yesterday's market made it easy to spot the stockpickers' favourites.

ComfortDelGro Corp was one of the most active stocks, rising 8.8 per cent, or 19 cents, to close at $2.36.

ComfortDelGro, which operates Singapore's largest fleet of taxis, had announced that it was in discussions with Uber Technologies on a potential strategic alliance.

Analysts were mainly positive on the news, but held off from raising their recommendations or targets on the stock pending firmer details.

In a note, DBS wrote: "Overall, despite a lack of details, we think this development is positive for ComfortDelGro and could work in favour of its share price.

This move could also signal to the market that ComfortDelGro's management is acting on market changes, and are looking for ways to counter the challenges."

Oil and gas production company KrisEnergy, meanwhile, was a notable gainer in a depressed sector after announcing an exploration deal in Cambodia.

KrisEnergy shares closed at 12.3 cents, up by 6 per cent.

"When the other oil and gas companies are struggling with their debt problems, KrisEnergy managed to show a surprise like that," Ms Yang said.

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