Local shares snapped a six-day winning streak yesterday on strong signs that the Chinese economy is slowing.
The pain was felt elsewhere as well, with markets across the region declining on data showing that China's exports shrank 4.4 per cent last month from a year earlier, the largest drop in two years. Imports fell 7.6 per cent, the most since July 2016.
The unexpected contraction overshadowed market optimism from last week's trade talks between Washington and Beijing.
Stock markets in South-east Asia were particularly hard hit by the news as China is the region's largest trading partner.
The Straits Times Index (STI) started the day strongly with a momentary spike above 3,200 points but plunged shortly after and spent the rest of the day trending downwards to close at 3,173.46, down 25.19 points or 0.79 per cent.
The decline ended a six-day winning streak that saw the STI climb nearly 140 points from a low of 3,012.88. About 1.28 billion shares worth $727.42 million changed hands, with losers beating gainers 242 to 142.
All but seven STI constituents ended the day in the red, with financials and industrials the biggest drags on the index. OCBC Bank gave up 1.29 per cent to $11.50, while DBS lost 0.85 per cent to $24.57.
Industrials mostly ended lower as well, except for ST Engineering, which managed a 0.28 per cent gain to $3.58.
The only other STI counter to end in the black was ThaiBev, up 2.9 per cent to 70 cents on trade of 60.1 million shares.
Bloomberg noted yesterday that the counter was likely to move on news that its rival, Anheuser-Busch InBev, is considering an initial public offering (IPO) of its Asian operations. Exotix Capital analyst Nirgunan Tiruchelvam told Bloomberg that the rumoured IPO would show ThaiBev and its subsidiary Sabeco to be "deeply undervalued".
Four of the five STI counters that stayed unchanged were under trading halts related to a $11 billion deal between CapitaLand and Ascendas-Singbridge to create Asia's largest diversified real estate group. They were Ascendas Real Estate Investment Trust (Reit), CapitaLand Commercial Trust, CapitaLand, and CapitaLand Mall Trust.
Best World International gained 4.5 per cent to $2.76 on news that it is investing in A*Star spin-off Celligenics. It plans to invest around $5.63 million for a 12.5 per cent stake in the biomedical start-up.