Bulls And Bears

Asian markets steady after Monday's sell-off

STI ends flat; bourses calm down after being rattled by Turkish turmoil

After starting the week rattled by financial turmoil in Turkey, Asian markets found their footing yesterday, with analysts noting that the quieter mood reaffirmed Monday's sell-off was based more on risk-off sentiment than on fundamentals.

Seoul, Tokyo and Australia recorded gains after falling the day before, and on the Singapore bourse, the key Straits Times Index ended flat at 3,242.87, down a mere 2.47 points, or 0.08 per cent, from 3,245.34 the day before.

About 1.84 billion shares worth $1.06 billion changed hands, compared with 2.31 billion shares worth $1.2 billion on Monday. Losers outnumbered gainers 208 to 201.

Among gainers, CapitaLand rose four cents, or 1.2 per cent, to $3.28 following news that it had won a bid to acquire two prime residential sites in Guangzhou, China, for 2.05 billion yuan (S$409 million). The acquisition is the property developer's second in less than three months.

Valuetronics rose 10.5 cents, or 16.7 per cent, to 73.5 cents after posting a 1.9 per cent increase in net profit for the first quarter yesterday. The electronics manufacturing services firm expects the slowed demand from its smart lighting customer Philips Lighting to recover for the rest of the year, and growth momentum in its consumer lifestyle product segment to be sustained by its customer's new series of innovative products.

Shares of ST Engineering continued a downward trend that started last Friday, retreating three cents, or 0.9 per cent, to $3.32.

They rose to $3.45 apiece after the group's second-quarter results were released last Wednesday, but have since retreated a total of 13 cents, or 3.8 per cent, in the last three days.

The Turkish lira fell to 6.6 lira per US dollar as of 5pm yesterday, having lost more than 40 per cent since the start of the year.

While the country's central bank has announced new measures to halt the lira's slide, analysts say its promises of "necessary measures to maintain financial stability" and liquidity for the banks are likely insufficient to soothe investors' fears.

FXTM's global head of currency strategy and market research Jameel Ahmad said there is some speculation that central banks in emerging markets might step in to protect their own currencies.

But this might prove fruitless at best since the markets are being driven by external headwinds, and potentially risky as investors could become more worried if the banks "start pushing the panic button", he said.

A version of this article appeared in the print edition of The Straits Times on August 15, 2018, with the headline 'Asian markets steady after Monday's sell-off'. Print Edition | Subscribe