Business

Markets bleed on fresh trade war fears

S&P Global Ratings raises risk level of trade interruption and geopolitical tensions to "high" from "elevated"

Reports that the US might clamp down on Chinese investments in technology have re-ignited fears that the world's two largest economies are headed towards another trade stand-off.

Singapore's benchmark Straits Times Index lost 56.57 points, or 1.64 per cent, to 3,382.78 yesterday.

UOB's Global Economics and Markets Research report noted that "market sentiment is expected to be weighed down" by such curbs, and traders proved the prediction right.

Across the bourse, losers beat gainers by 318 to 115 - or roughly 11 down for every four up.

Ms Pan Jingyi, market strategist at IG Asia, wrote of the Wall Street jitters: "What appears to be sending prices lower still resembles pure fear amid the uncertainties, which alongside the positive growth momentum, may keep prices in this volatile state."

Lead weights on the index included Singtel, which shed $0.05, or 1.48 per cent, to $3.34 on a movement of 27.71 million shares.

Casino operator Genting Singapore slid again, falling by $0.02, or 1.85 per cent, to $1.06, with 42.48 million shares changing hands. Singapore Post closed down by $0.05, or 3.57 per cent, at $1.35.

This was in spite of a PhillipCapital morning note that pegged market sentiment on the counter as "bullish".

"After breaking briefly below the $1.32 support area on March 26 intra-day, buyers succeeded in defending the support area and closed price at the day's high of $1.35," the report said. "Expect the uptrend to resume next for price to test the $1.45 resistance area followed by $1.55."

Developer Oxley Holdings' $95 million purchase of freehold Ampas Apartments did not sit well with investors either.

The volume of shares traded jumped to almost 19.4 million, from 9.93 million the day before, with the price slipping by one and a half Singapore cents, or 2.94 per cent, to $0.495.

E-commerce distributor Y Ventures Group was up by $0.10, or 18.69 per cent, to $0.635, on the heels of DBS Group Research initiating coverage with a "buy" call.

Analysts Carmen Tay and Sachin Mittal had set a target price of $0.77.

And property player Lian Beng Group was lifted on the news that its SLB Development unit is headed for a public offering on the Catalist board. It finished higher by one and a half Singapore cents, or 2.29 per cent, at $0.67.

But Sembcorp Marine's ever-capricious counter slipped by $0.03, or 1.36 per cent, to $2.18 on a turnover of 8.6 million shares. It has clinched a new build floating production, storage and offloading vessel contract from TechnipFMC.

Debutant Sasseur Reit ended at $0.805 on its first day, or 0.63 per cent above its offer price of $0.80 a unit.

Across the region, both the Nikkei 225 and Kospi lost 1.34 per cent, while Shanghai was down by 1.4 per cent. In Hong Kong, the Hang Seng fell by 2.5 per cent to a three-week low.

"Asian markets have witnessed the most significant falls so far," the Schroders investment communications team wrote yesterday.

"Large exporters play a significant part in the Japanese economy and there are concerns that they could be caught up in any US-China trade war."

S&P Global Ratings has raised the risk level of trade interruption and geopolitical tensions to "high" from "elevated". "While Beijing's response has been moderate thus far, the risk of escalation is rising," the firm noted.

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