Bulls And Bears

Asian markets down as hopes for trade deal dim

STI dips 0.3% as news of US Senate passing HK Bill leaves bourses in sea of red

If ructions over trade were not enough to deal with, regional investors had to confront a new source of friction yesterday - the United States Senate passing a Bill backing Hong Kong protesters.

Beijing's considerable ire sent a sea of red sweeping across equity markets in Asia, although the Straits Times Index (STI) here appeared to weather it better than most, dipping just 9.09 points, or 0.28 per cent, to 3,229.78.

Elsewhere, markets in Australia, China, Hong Kong, Japan, Malaysia, South Korea and Taiwan all fell.

US President Donald Trump can resort to using his presidential veto, but it is unlikely to change the outcome as the Bill passed both Congress and the Senate with overwhelming majorities.

Prospects of a trade deal have been hit hard, say experts.

"Considering that the US and China are struggling even to agree to 'phase one'... hopes for a swift conclusion to the trade conflict have clearly been misplaced," FXTM market analyst Han Tan noted.

AxiTrader chief Asia market strategist Stephen Innes said "future US-China trade discussions, if they continue at all, could be fraught with peril, so it makes sense for investors to at least buy some risk-off insurance".

There were other factors investors had to grapple with yesterday, although not all were negative.

One was the move by China's central bank to lower some interest rates as part of a wider economic stimulus strategy.

In the local market, losers trumped gainers 262 to 145 on a day when trading volumes came in at 1.2 billion shares worth $1.1 billion, while 19 of the blue-chip index's 30 counters ended in the red.

Investors paid more attention to Singtel, which added 2.5 per cent to $3.27 on trade of 42.3 million - 78 per cent more than the average over the past 15 trading days.

There were no local headlines concerning the telco, so the activity was likely influenced by its associate Bharti Airtel, whose stock surged after Indian telcos indicated plans to raise phone rates.

Singtel has an 8.2 per cent weightage on the STI, so the Bharti news helped bolster the index yesterday.

Like the broader market, the banks were mixed. United Overseas Bank lost 1.1 per cent to $26.39, OCBC was unchanged at $11.12, and DBS fell 1 per cent to $26.18.

The oil price slump prompted investors to jettison their energy players. Rex International dived 9.4 per cent to 17.4 cents, while GSS Energy shed 6.4 per cent to 8.8 cents.

A version of this article appeared in the print edition of The Straits Times on November 21, 2019, with the headline 'Asian markets down as hopes for trade deal dim'. Print Edition | Subscribe