SINGAPORE - Stocks in Singapore and Asia were set for big weekly losses on Friday morning (June 22) as a trade conflict between the United States and other major economies continued to escalate.
At 10.20am, the Straits Times Index (STI) had shed 14.62 points or 0.4 per cent to 3,285.38, from Thursday's close. For the week, the index is down 2 per cent from last Thursday's close of 3,356.73, before the Hari Raya Puasa public holiday on June 15.
Jingyi Pan, market strategist at IG Group, said: "The STI has broken below the 3,300 level with the next support seen only around 3,264, sustaining the recent downtrend."
Stocks of all three major local banks also retreated on Friday: OCBC lost 0.9 per cent to $11.76 as at 10.41am; UOB fell 0.8 per cent to $26.32; while DBS was down 0.2 per cent to $26.98.
Stocks were down across most of Asia on a weekly basis. Compared to June 15, the Nikkei 225 Index dropped 1.6 per cent 22,489.96 as at 9.53am on Friday, while the Topix was 3 per cent lower to 1,736.2. South Korea's Kospi fell 2.6 per cent to 2,340.99, while Hong Kong's Hang Seng Index tumbled almost 4 per cent to 29,116.7.
Added Ms Pan: "In line with the simmering trade tensions, the picture fails to look bright for the Asian region. Expect the pressure to prevail for Asian markets this morning, with particular attention on energy names after the slight swing last night."
Within the region, Australia's S&P/ASX 200 bucked the trend, rising 2.4 per cent from June 15 to 6,242.301 as at 9.58am on Friday.
In the latest developments on the trade front, the European Union's import duties of 25 per cent on a range of US products came into effect today. The EU tariffs are seen as a tit-for-tat response to US tarrifs of 25 per cent on steel, and 10 per cent on aluminum that the EU claims as signs of US protectionism.
"We did not want to be in this position," European Trade Commissioner Cecilia Malmstrom said in a statement on Wednesday. "However, the unilateral and unjustified decision of the US to impose steel and aluminum tariffs on the EU means that we are left with no other choice."
Meanwhile, White House officials are trying to restart talks with China before the US tariffs on Chinese good are set to take effect on July 6, in a bid to avert a full-blown trade war with the world's second largest economy.
On currency markets, the US dollar index, which tracks the greenback against a basket of peers, edged 0.1 per cent lower to 94.792 on Friday, after touching 95.533, its highest level since last July, according to data from Reuters.
The US dollar bought 109.95 yen, having slipped 0.65 per cent so far this week.
The Singapore dollar also strengthened against the greenback, with one US dollar fetching S$1.3576 as at 12.43pm on Friday, compared to its close of S$1.3583 on Thursday.
Separately, a hawkish tilt from UK's central bank surprised the market with the Bank of England's chief economist voting for an immediate rate hike - and the pound advanced 0.2 per cent to 0.7539 per US dollar.
The euro was up slightly at 0.8618 euro per US dollar, after eurozone ministers declared the end of Greece's debt crisis with a bailout exit deal.
On the commodities front, gold was priced at US$1,267.66 an ounce, down 0.9 per cent from a week ago.