Bulls And Bears

STI declines in line with regional markets

Investor sentiment hit by resurgence of pockets of Covid-19 infections globally

Local shares closed lower in tandem with regional markets yesterday, amid a bearishness driven largely by pockets of resurgence of Covid-19 across the globe, particularly in Europe and Britain.

Investors were also unnerved by steep falls on Wall Street on Friday that hinted at more volatility in the weeks ahead, with the United States elections heating up.

The wary mood left the benchmark Straits Times Index down 12 points or 0.48 per cent at 2,485.71 with 1.37 billion shares worth $988.07 million changed hands. Losers well outnumbered gainers 350 to 127.

Mr Stephen Innes, chief global markets strategist at AxiCorp, noted that an added "drip-feed of negativity" is plaguing markets amid the approaching US elections.

He said: "There is a remarkable tendency for fear to build, and volatility rises about four to six weeks before voting events, even if we have talked about them for months ahead.

"There is always a bit of a panic attack, and this one could be worse when viewed through the coronavirus lens."

Pramerica chief investment officer Fabrizio Fiorini told Bloomberg News that there are "too many expectations about the US economic resilience", adding "there is more sell-off to come. Election risk is underestimated".

Only three of the 30 STI constituent stocks finished the day up. Jardine Matheson Holdings was the biggest advancer for the day, closing 1.58 per cent higher at US$41.17 while Jardine Strategic Holdings advanced 0.97 per cent to US$20.85.

STI gainer Sembcorp Industries climbed, following news of its $1.5 million investment into a fund to support essential workers, charities and migrant workers. The counter ended the day at $1.34, up 0.75 per cent. At the other end of the spectrum, Singapore Airlines emerged the biggest loser, down 2.29 per cent to close at $3.42. Airline gateway services provider Sats lost 1.4 per cent to $2.82.

Regional markets mostly ended lower, in line with the Wall Street retreat.

The Hang Seng Index lost 2.06 per cent on investor concerns that the fresh coronavirus spikes may be forcing governments to re-impose economy-damaging lockdowns.

The Shanghai Composite fell 0.63 per cent while Malaysian stocks dipped 0.48 per cent but the Nikkei 225 bucked the trend, inching up 0.18 per cent.

The S&P/ASX 200 in Australia closed at a 2.5-month low after dropping 0.7 per cent on the back of losses among miners and the big financial players.

A version of this article appeared in the print edition of The Straits Times on September 22, 2020, with the headline 'STI declines in line with regional markets'. Print Edition | Subscribe