Market unmoved by summit outcome
Focus still on key central bank meetings, May inflation figures and other macro data
"Meh" pretty much wraps up the reaction of the Singapore bourse to the "better-than-expected" outcome of the US-North Korea summit yesterday as more pressing issues dominated investors' attention.
The Straits Times Index was in the red for most of the day after brief gains in the early hour and retreated 11 points or 0.32 per cent to finish at 3,430.69.
Elsewhere, the outcome was mixed with South Korea's Kospi closing flat - down 0.05 per cent - while key indices in Japan, Hong Kong and China had gains and Malaysia finished in the red.
The pact reached at the summit between US President Donald Trump and North Korea's Kim Jong Un was a gain, with North Korea committed to work towards the "complete denuclearisation of the Korean peninsula" and for "lasting and stable peace".
But the local market shrugged that off as traders were more concerned about what lies ahead for an intense week packed with key central bank meetings and a string of macro data due for release including May inflation figures and real average earnings growth out of US - the world's largest economy.
The outcomes of the US Federal Open Market Committee meeting and European Central Bank meeting later this week are key events to watch.
"It is almost the done deal for the Fed to hike its interest rate for the second time this year.
"However, the key focus will be the dot charts as well as terminal rate, which the market will assess whether the Fed rate hike will be three times or four times," said OCBC Bank.
Never too far behind are fears over global trade wars, especially after the hostile ending of the G-7 summit and potential retaliatory measures by US allies.
The end of the week brings another key risk event as it marks a crucial deadline for the US that has said it will unveil the list of Chinese imports to be taxed by additional levies.
What is happening in the trade arena is "I personally believe, a far, far bigger existential global threat", said ING's chief economist and research head of Asia Pacific Rob Carnell.
"The European Union is ready to put tariffs on the US on July 1. I anticipate retaliation for their retaliation to follow soon after, and then some retaliation to that retaliation... This gets ugly fast. It is on a global scale. There are no winners," he warned.
On the home front, turnover was somewhat subdued with some 1.69 billion shares worth $967.9 million versus Monday's 1.8 billion shares worth $968 million traded.
Losers outpaced gainers with 227 counters down and 155 counters up with all three Singapore banks in the red.
Singtel closed unchanged at $3.24. In a sector update report, UOB Kay-Hian called a "buy" rating on Singtel given its defensive qualities, chiefly due to its geographical diversification.
Yangzijiang Shipbuilding Holdings slipped one cent or 1 per cent to 98.5 cents. The counter was the day's fifth most active with 21 million shares worth $21 million done.
Year-to-date, the stock has lost 34 per cent and at current price, OCBC Investment Research deems the counter a "buy" given its "strong execution capabilities", net cash position and positive operating cash flows over the past four years. Its share buyback plan could further lend support to share price.
For full listings of SGX prices, go to http://btd.sg/BTmkts
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now
