Bulls And Bears

Asian markets mixed as investors turn cautious

STI defies dips in tech and energy shares with a modest gain, helped by banks

Caution has become the watchword for investors here and across the region amid economic uncertainty. The wary mood - heightened by falls on Wall Street overnight - left Asian markets mixed yesterday.

The Straits Times Index here defied dips in tech and energy shares to eke out a modest gain of 0.69 point, or 0.02 per cent, to 3,032.08.

Losers trumped gainers 203 to 166 on trade of 1.6 billion shares worth $970.4 million.

Elsewhere, Shanghai gained 0.33 per cent and Japan's Nikkei 225 also recovered from earlier losses to close 0.37 per cent higher. But Hong Kong's Hang Seng slipped 0.38 per cent while the South Korean Kospi was down 0.4 per cent.

Overnight, American stocks finished lower with manufacturing firm Caterpillar noting that costs were rising from higher steel prices and tariffs. Mainstay Capital Management chief executive David Kudla told Bloomberg TV: "We've come up upon a tremendous wall of worry for US stocks and stocks around the world. Concern... is the deceleration in earnings growth."

The spotlight will be on US technology stocks this week, with Microsoft, Twitter, Alphabet and Amazon reporting results.

Shares of US chip companies fell after Texas Instruments gave disappointing guidance overnight.

Tech stocks in Asia were mostly flat yesterday although the concerns did hit some shares here.

AEM fell 1.27 per cent to 78 cents, while contract manufacturer Hi-P lost 1.26 per cent to 78.5 cents.

Home-grown Creative Technology declined 0.89 per cent to $5.59. Its shares have fallen over the past month despite promising a breakthrough with the new Super X-Fi amp headphone amplifier.

Energy firms also struggled yesterday. Crude prices fell almost 4 per cent on Tuesday to a two-month low after the Saudi energy minister said the country could supply more oil quickly if needed to ease global concerns. These centre on US sanctions to be imposed on Iran next month, the crisis in Venezuela and rising demand in America.

Singapore firms KrisEnergy fell 4.3 per cent to 8.9 cents, while Rex International tumbled 16.1 per cent to 7.3 cents.

But the STI was boosted by the banks: DBS was up 0.54 per cent to $24.10, OCBC Bank added 0.76 per cent to $10.64, and United Overseas Bank rose 0.48 per cent to $25.02.

IG noted that the "recent pullback does... increase the attractiveness of local bank stocks with favourable valuations".

A version of this article appeared in the print edition of The Straits Times on October 25, 2018, with the headline 'Asian markets mixed as investors turn cautious'. Print Edition | Subscribe