Bulls And Bears

Asian markets fall after Wall Street sell-off

STI shares pare early losses but Oct lives up to reputation as most volatile trading month

Local shares fought back in the afternoon and escaped the carnage that swept global markets yesterday, but there was still plenty of bloodshed to go around.

It looked like it would be a black day when the market opened 1.4 per cent down - the second time this month it has lost at least 1 per cent at the starting gate after an overnight sell-off on Wall Street.

That Wall Street plunge was eye-watering - down 608 points to wipe out all the considerable gains racked up this year.

It pointed to a similar rout here, but shares managed to pare the early losses to end 19.2 points weaker at 3,012.84. Around 1.9 billion shares worth $1.2 billion were traded, with 269 counters down and 132 up.

The STI's heavy hitters were awash in red with losses across all three banking stocks. DBS fell 1.6 per cent to $23.71, UOB slipped 0.3 per cent to $24.95 and OCBC sank 0.4 per cent to $10.60.

M1 retreated 0.5 per cent to $2.09. The telco posted a 5.5 per cent drop in quarterly net profit to $34.5 million on the back of a 10 per cent jump in operating revenue to $274.6 million.

It was far worse elsewhere. Japan led the wounded with the Nikkei 225 sinking 3.7 per cent, while Australia's ASX 200 retreated 2.8 per cent to a 52-week low and Taiwan's Taiex fell 2.4 per cent. South Korea's Kospi skidded 2.4 per cent to its lowest level since January 2017, but China stood out as an outlier with the Shanghai Composite ending flat.

The MSCI Asia Pacific Index, which reflects how regional shares are faring, fell as much as 3 per cent and has slid more than 20 per cent from its January peak.

The Asian meltdown puzzled most analysts, as many of the fear factors are known and should have been factored in. Still, the mood was so tense "you could cut it with a butter knife", said Oanda's regional trading head Stephen Innes.

The trigger was Wall Street.

DBS rates strategist Eugene Leow and FX strategist Philip Wee noted: "Appetite for risky assets is simply not as good as it was a month ago."

October is certainly living up to its reputation as the most volatile trading month of the year. FXTM chief market strategist Hussein Sayed added: "(It) has been a terrible month for equity investors so far."

The STI has lost 9 per cent this month, while other key Asian gauges have fallen between 9 and 15 per cent.

A version of this article appeared in the print edition of The Straits Times on October 26, 2018, with the headline 'Asian markets fall after Wall Street sell-off'. Print Edition | Subscribe