Moderation in Chinese data drags STI

The soft start to the week for Singapore and regional markets continued for a second day on the back of growing concerns that the already delayed US tax cuts could be further pushed back.

On Tuesday, the benchmark Straits Times Index (STI) lost 20.04 points or 0.59 per cent to end lower at 3,399.09 after retreating from an intraday high of 3,422.46.

Across Asia, Tokyo's Nikkei, Seoul's Kospi, Hong Kong's Hang Seng and Australian shares were down, while New Zealand equities were up.

Turnover for the day in Singapore came in at 2.6 billion worth $1.7 billion, working out to an average of $0.65.

Excluding warrants, the advance-decline score was 149-322, indicating broad-based losses.

The index's performance closely followed the Dow futures which were unchanged five minutes before 5pm.

Adding on to uncertainty was a broad-based moderation in Chinese data. As Mr Nathan Chow, economist at DBS Group Research noted, growth in China's industrial production declined to 6.2 per cent year-on-year from 6.6 per cent in September.

"The slowdown was mainly attributed to air-pollution curbs. Regulators recently ordered steel mills and aluminium factories to curtail production, which affected wide swaths of the country's manufacturing sector. Looking at the breakdown, output increased at a slower pace for manufacturing (6.7 per cent from 8.1 per cent), while mining production continued to decline (-1.3 per cent from -3.8 per cent)," Mr Chow said.

Market movers UOB, Singtel, Wilmar International, Keppel Corporation and OCBC wiped out more than 13 points from the index.

In particular, Wilmar International, which posted a 5.7 per cent year-on-year fall in net profit to US$370 million, saw its counter losing 13 Singapore cents to end at $3.19 on a volume of 18.2 million.

In a brokers' report, OCBC maintained its "hold" call on the stock but lowered the target price from $3.66 to $3.51. "Looking ahead, management expects the good performance in the oilseeds and grains segment to continue into Q4-17, with crush margins and volume likely to remain positive. Performance of the other major business segments is expected to be "satisfactory", the research house said.

Malaysian property developer Capital World was actively traded, with the stock adding 0.5 Singapore cent to end at $0.098 on a volume of 23.8 million units.

Still on the actives list was Cosco Shipping International whose shares closed 4 Singapore cents up to $0.585 on a volume of 104.6 million.

Also on the actives list was Global Logistic Properties whose shares were down 1 Singapore cent to $3.32, with 76.6 million units changing hands.

US tax cuts aside, the world's top four central bankers met in Frankfurt yesterday for talks hosted by European Central Bank (ECB) President Mario Draghi, who was joined by US Federal Reserve Chair Janet Yellen, Bank of England (BOE) Governor Mark Carney and Bank of Japan (BOJ) Governor Haruhiko Kuroda.

Mr Philip Wee, foreign exchange strategist at DBS Group Research, noted that the changing of guard at the world's top central banks over the next couple of years "mark a shift from monetary policy divergences towards convergence", likely in the latter half of 2018.