Business

Markets mixed on US, China gestures

STI drops 0.3 per cent while Japan gains 0.75 per cent on optimism about new Cabinet

Washington "returned the favour" by delaying tariffs on Chinese imports till mid-October. But those more than familiar with the unpredictable nature of their relationship, chose to book profits ahead of the European Central Bank's rate decision.

Singapore's Straits Times Index (STI) moved ahead at the opening before positions were exited, sending the benchmark dropping 9.56 points or 0.3 per cent to close at 3,194.96 yesterday.

It was mixed elsewhere in the Asia-Pacific as Australia, China, Japan and South Korea locked in gains.

Like the local market, however, Hong Kong and Malaysia posted losses.

Japan's benchmark index, the Nikkei 225, added 0.75 per cent or 161.85 points to close at 21,759.61, making it eight straight sessions of gains.

This comes on the back of optimism about Japan's new Cabinet and US-China trade tensions that might have turned a corner.

In what can be considered a goodwill gesture, China on Wednesday announced tariff exemptions on some US imports ahead of next month's trade talks in Washington.

US President Donald Trump responded in kind by delaying tariffs effective from Oct 1 to Oct 15.

Never wanting to look like the weaker party, Mr Trump said the request was made by China's Vice-Premier Liu He as the initial date for the implementation of tariffs fell on the People's Republic of China's 70th anniversary.

The relationship between Beijing and Washington has ebbed and flowed over the past year-and-a-half but mostly in predictable fashion.

Markets take in positive news, then ride the wave of optimism, only to get shocked before the cycle repeats itself.

As FXTM market analyst Han Tan put it: "Recent history has only shown how quickly previous bouts of optimism can unravel, dashed by the erratic and unpredictable nature of the US-China trade impasse.

"This ensures a lingering air of caution over global markets, even as risk assets are given another opportunity to make hay while the sun shines.

"Financial markets are now firmly positioned for central bank love globally, but I feel the newly found bullish consensus is built on fragile foundations."

In Singapore, trading volume was 985.7 million securities, 82 per cent of the daily average in the first eight months of 2019. Total turnover came to $1.01 billion, 93 per cent of the January-to-August daily average.

Across the market, decliners beat advancers 181 to 179. The blue-chip index had 13 of its 30 counters in the red.

With 75.9 million shares changing hands, Yangzijiang Shipbuilding maintained its place as the STI's most active counter.

Its stock advanced five cents or 4.7 per cent to $1.11. Shares in the shipbuilder continue to recover after diving 30 per cent over two sessions last month.

The local banks recorded gains yesterday. DBS Group Holdings was the best-performing of the three, advancing $0.12 or 0.5 per cent to $25.37. OCBC Bank edged up one cent to close at $11.01 and United Overseas Bank finished at $26.41, up $0.04 or 0.2 per cent.

Thai Beverage saw heavier-than-usual trading, adding 0.5 cent or 0.6 per cent to 90.5 cents with 31.5 million shares changing hands.

Tech plays generally outperformed the market.

AEM Holdings added one cent or 0.9 per cent to $1.15 while Venture Corporation climbed seven cents or 0.5 per cent to $15.81.

Among penny stocks, TEE International was up 0.4 cent or 12.9 per cent to 3.5 cents before it called for a trading halt in the morning amid a probe into unauthorised transactions made under the instruction of its group chief executive and managing director

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BUSINESS & FINANCE