Week's trading kicks off on a poor note
Losers trounce gainers 241-155 as local bourse snaps two straight gains following tough German and NZ elections
The local bourse snapped two straight days of gains to start the trading week on a weak note as traders digested the weekend election results from Germany and New Zealand and geopolitical "noise" continued to hang in the air.
The flat showing in Wall Street last Friday night didn't inspire as well.
The key Straits Times Index fell 4.34 points or 0.14 per cent to finish at 3,215.91 yesterday alongside losses in other major regional markets.
Hong Kong's Hang Seng lost 1.4 per cent, China's Shanghai Composite fell 0.3 per cent while South Korea's Kospi retreated 0.4 per cent.
Japan's Nikkei 225 bucked the trend, climbing 0.5 per cent in anticipation of the Japanese Prime Minister Shinzo Abe's decision to call a snap election.
IG Market strategist Pan Jingyi said: "We have certainly seen a tough weekend for elections with both the German and New Zealand election providing some reasons to unnerve investors."
German Chancellor Angela Merkel won a fourth term over the weekend but faced a fractured parliament as support for the far-right surged. In New Zealand, the ruling National Party won the largest number of votes but, similarly, failed to secure a ruling majority.
The uncertainty over an eventual ruling coalition could bring some caution to markets although attention is likely to swing towards the US tax reform plan this week.
US President Donald Trump is expected to provide key details on tax reforms this week, which analysts expect could buoy markets.
"The only leaked information so far, is that the corporate tax may be lowered, from 35 per cent to 20 per cent.
"This is still higher than what Trump had hoped for, but if legislation is passed before year-end, it will still be good news for equity markets," said Hussein Sayed, FXTM chief market strategist.
Central banks could also hog the spotlight this week, with US Federal Reserve chief Janet Yellen and the European Central Bank's Mario Draghi taking to the rostrums.
"More speakers does not necessarily equate to more clarity, however," said ING Asia Pacific's research head of Asia Rob Carnell.
Singapore's headline and core inflation came in lower than expected in August, based on the latest data released by the Department of Statistics.
At the local bourse, turnover came in at 1.85 billion shares worth $914 million. Losers trounced gainers with 241 counters down and 155 counters up.
Absolute losses were led by counters such as Jardine Matheson, which fell 44 US cents or 0.7 per cent to US$63.96.
CapitaLand slipped four Singapore cents or 1.1 per cent to $3.57 while SingTel fell one Singapore cent or 0.3 per cent to $3.67.
Yangzijiang Shipbuilding Holdings retreated 1.5 Singapore cents or 1 per cent to $1.395.
The counter has fallen more than 14 per cent from a high of $1.625 on Aug 30, following the company's share placement announcement.
In a recent report, OCBC Investment Research said the group may be preparing for a "significant M&A ahead" as it was already financially robust with significant cash.
Hatten Land climbed 0.2 Singapore cent or 1 per cent to 19.9 Singapore cents when trading resumed yesterday, following an announcement that it has inked a convertible loan agreement to raise US$20 million.
Olam International fell 2.5 Singapore cents or 1.2 per cent to $1.985, following last Friday's announcement that it has sold farmland assets for US$110 million in cash.
This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts