Business

STI falls 0.4% as regional markets weaken

Key indices in Japan, China, Hong Kong, South Korea, Australia and Malaysia fall as political tension mounts in US

A return of risk-off sentiments drove the Singapore bourse's key index to snap four straight days of gains yesterday on the back of sharp declines in Wall Street overnight as political tension heightened once again in the US after another high-profile exit.

The Straits Times Index (STI) slipped 14.32 points or 0.4 per cent to finish at 3,539.41. Its regional peers echoed the same mood with losses across the board in key indices in Japan, China, Hong Kong, South Korea, Australia and Malaysia.

"The highly watched US CPI certainly came in line with expectations, enabling the take-off of equity markets in the early hours . . . (but) US President Donald Trump's firing of US Secretary of State Rex Tillerson short changed the bull run," said IG Markets' Jingyi Pan, referring to the overnight sell-off in Wall Street.

The Dow Jones Industrial Average fell 0.7 per cent while the tech-heavy Nasdaq Composite Index broke a seven-session winning streak to slip 1 per cent and the S&P 500 index dropped 0.6 per cent.

February's inflation data out of the US came in line with expectations and with that, most expect the Federal Reserve's tightening timetable to stay at three rate hikes this year. Worries over a steeper pace of tightening had earlier roiled global equities and driven US Treasury yields higher.

Mr Neil Williams, Hermes Investment Management's senior economic adviser, said: "Recoveries are gaining traction with, after a decade, G-5 economies having reclaimed their real GDP since the crisis.

"So, with central banks less dovish, low unemployment fanning hopes of faster wage growth and US tax cuts, the equity falls and volatility pick-up look indirectly, via the bond market, as testament to recovering, rather than relapsing, economies."

Fears over a trade war also ratcheted up after it was reported that Mr Trump may slap additional measures on China as punishment for the country's alleged intellectual property theft.

Markets were also digesting crucial macro data out of China to assess to what extent activity had slowed in February given the Chinese New Year holidays.

The world's second-largest economy did not disappoint, with January-February factory output coming in stronger than expected while retail sales growth improved from December but was slightly below expectations.

The local bourse saw some 1.9 billion shares worth S$1.2 billion done versus Tuesday's 1.5 billion shares worth S$1.3 billion. Losers outnumbered gainers with 231 counters down and 182 counters up.

Banking stocks fared mixed with UOB losing 17 Singapore cents or 0.6 per cent to S$28.82 and OCBC retreating five Singapore cents or 0.4 per cent to S$13.53.

DBS closed higher by five Singapore cents or 0.2 per cent at S$29.12.

Singtel lost one Singapore cent or 0.3 per cent to S$3.40. StarHub fell one Singapore cent or 0.4 per cent to S$2.43 while M1 closed unchanged at S$1.78.

Noble Group gained 1.3 Singapore cents or 8.4 per cent to 16.8 Singapore cents after a trading halt in the morning when it confirmed a debt rescue plan.

Boustead Singapore rose three Singapore cents or nearly 4 per cent to 82.5 Singapore cents.

The company's substantial shareholder and former deputy chairman Saiman Ernawan sold off his entire stake in the company between March 9 and March 12 at some 76 Singapore cents per share.

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