STI closes flat after losing early gains

News reports that Washington is considering Huawei-like sanctions on another Chinese tech company, Hikvision, saw Singapore shares erase early gains to close flat.

The local market had a bright start, recovering from Tuesday's knee-jerk reaction to first-quarter gross domestic product missing street expectations and a lowered growth outlook.

Investors were also buoyed by the US' Huawei ban being lifted for 90 days.

The Straits Times Index (STI), which dipped into negative territory in the late session, recovered to close at 3,183.14, down 0.12 point.

While the possible US action on Hikvision dented the already fragile investor confidence due to the US-China trade spat, its effect, for now, seems muted.

"Even though reports suggested that the Trump administration could potentially blacklist Chinese surveillance companies and add fuel to fire, investors are likely waiting for official confirmation," IG market strategist Pan Jingyi said.

Elsewhere in Asia, Australia, Hong Kong, Japan and South Korea posted modest gains.

On the other hand, China and Malaysia closed lower.

In Singapore, trading volume clocked in at 939.17 million securities.

This is 74 per cent of the daily average in the first four months of 2019.

Meanwhile, total turnover came to $931.2 million, 90 per cent of the January-to-April daily average.

Across the market, decliners outpaced advancers 182 to 177.

The benchmark index had 15 of the STI's 30 components trading in the red.

Among them, Genting Singapore was the benchmark index's most traded stock, with 44.5 million shares changing hands, closing 0.5 cent or 0.6 per cent lower at 87.5 cents.

Since posting its first-quarter results on May 9, the casino operator's shares have fallen 7.9 per cent.

ANTICIPATING

"Genting Singapore's fundamentals are still good but investors are anticipating an outflow of cash for expansion plans and other cost increases," a dealer said.

Despite Genting's recent slide, remisier Ernest Lim noted that most analysts remain positive on its outlook.

The Jardine companies were among the best performers on the STI.

Jardine Matheson Holdings (JMH) added US$2.36 (S$3.25) or 3.9 per cent to US$62.95; Jardine Strategic Holdings (JSH) advanced US$1.46 or 4.2 per cent to US$36.52; and Jardine Cycle and Carriage gained 72 cents or 2.18 per cent to $33.76.

Ms Pan suggested that a JMH subsidiary's purchase of JSH shares on the London stock exchange on Tuesday aided the surge for the Jardine counters. JMH is a subsidiary of JSH.

Their performance helped the benchmark index counter the slide in shares of the local banks.

DBS Group Holdings dropped 31 cents or 1.2 per cent to close at $25.43. OCBC Bank dipped seven cents or 0.6 per cent down at $11.02.

United Overseas Bank fell 30 cents or 1.2 per cent to settle at $24.53.

Property player CapitaLand dropped five cents or 1.5 per cent to close at $3.27.

With CapitaLand's stock unlikely to go below $3.20 under current market conditions, long-term investors with excess funds can consider accumulating stock in tranches, Mr Lim told clients in a note.

Tech counters, which were sold off on Tuesday on worries of the disruptive impact Huawei's US ban would have on global technology supply chains, traded mixed.

AEM Holdings closed unchanged at 93 cents.

Hi-P International finished two cents or 1.6 per cent lower at $1.22 while Venture Corp gained six cents or 0.4 per cent to end at $15.43.

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