Business

STI dips for fourth straight day

Investors stay cautious over US-China trade tensions

Volatile factory output data and trade tensions between the world's two biggest economies weighed on Singapore yesterday, despite reports that the US and China have opened talks on tariffs.

The benchmark Straits Times Index lost ground for the fourth straight day, dipping by 8.93 points, or 0.26 per cent, to 3,412.46.

It had started the day on soft footing, then rallied after the lunch break to an intra-day high of 3,429.75 around 3.20pm. But a sell-off in the last hour or so of trading eroded and then erased those gains.

Down for the day were two of the three local banks, with DBS Bank losing 19 cents or 0.69 per cent to $27.21, while OCBC Bank retreated seven cents or 0.54 per cent to $12.80. United Overseas Bank ended flat at $27.40.

Meanwhile, Genting Singapore was the day's second-most traded stock, losing one cent, or 0.91 per cent, to $1.09 on a volume of 35.3 million shares.

Singtel was not far behind, in third place, as 32.9 million shares changed hands. The counter declined by three cents, or 0.89 per cent, to $3.36.

But across the bourse, gainers outnumbered losers by a hair's breadth, 214 to 210.

Some 1.37 billion shares, worth around $1.36 billion, changed hands.

HLH Group shot to the top of the actives list on volume traded, with a turnover of 44.5 million shares, after it announced a deal to sell its 98-room hotel in Cambodia for $15.7 million.

It added 0.2 cent, or 40 per cent, to finish at 0.7 cent.

Loss-making Ayondo, the first pure-play financial technology company to list here, closed its first day on the Catalist board at 26 cents - the same as its offer price. It had debuted 7.7 per cent lower, at 24 cents, at the opening bell. About 12.3 million shares were traded.

Creative Technology was a big gainer for the day, closing higher by 94 cents, or 18.2 per cent, at $6.10. Amid investor speculation about the prospects of a new audio product, the stock has been swinging up and down since Feb 22, when shares traded at $1.25 apiece.

HOT

Sembcorp Marine was hot on a churn of almost 24 million shares, rising by 14 cents, or 6.7 per cent, to $2.23, while fellow offshore and marine counters Marco Polo Marine and Falcon Energy both traded with volumes above 14 million shares.

Oil prices have been firm of late, with Brent near the US$70-a-barrel mark, as tensions mount in the Middle East.

Saudi Arabia has come under missile fire from the conflict in Yemen, while US President Donald Trump's appointment of a new national security adviser has raised alarm bells of a turn against petrol producer Iran.

Yesterday's equities lethargy mirrored caution in other asset classes.

DBS rates strategist Eugene Leow and foreign exchange strategist Philip Wee remarked in a morning research note: "Risk aversion is likely to persist in the markets on US-China trade tensions.

"As long as Washington and Beijing keep up their tit-for-tat trade war rhetoric and actions, safe haven play is likely to drive the Japanese yen stronger against the euro and the Australian dollar."

Singapore was not the only Asian market to see a slump.

With China firmly in Mr Trump's crosshairs, Shanghai went down by 0.6 per cent.

But there were brighter skies elsewhere in the region. Hong Kong added 0.79 per cent, and Tokyo, 0.72 per cent.

Seoul was up by 0.84 per cent, after the US and South Korea reached a consensus on the details of an updated bilateral trade arrangement - including a quota on South Korean steel exports to America.

Mr Greg McKenna, AxiTrader's Australia-based chief market strategist, commented in his daily column that "the price action is not good".

"Just when traders were gearing up for an acceleration in the US economy, when it looked like global growth might have one or two years of genuinely synchronised growth, we have had the spectre of inflation, and now Mr Trump's tariffs and a trade war materially increase uncertainty," he added.