Bulls And Bears

Investors cautious amid global growth concerns

Many Asian bourses end day with losses, but potential Brexit deal may offer upside

Investors seem to be clinging on to positive news, be it hopes of a Brexit deal or signals of a strong US corporate season.

But they were reminded yesterday of the reality of global growth concerns, US-China issues as well as doubts over a Brexit deal, which made for a cautious session.

There could be some upside for equities today after British Prime Minister Boris Johnson announced at the close of Asia trading that a new Brexit deal with the European Union had been reached.

"Bearing in mind that Parliament still has to give the deal the go-ahead and sentiment has wavered, we could be in for a choppy end to the week," one dealer told The Business Times.

The Straits Times Index (STI) opened with little movement but trended downwards as the session went on, ending at 3,126.14, falling 8.57 points or 0.3 per cent. Among other Asia-Pacific indexes, Australia, China, Japan and South Korea all closed with losses. Malaysia was flat.

But Hong Kong's Hang Seng Index closed at a one-month high. Sentiment among traders there was boosted as major lenders agreed to adopt measures to support businesses.

Singapore's non-oil domestic exports continued to dip, with September's reading showing an 8.1 per cent year-on-year fall due to lower exports to the United States, Europe and Japan. That said, it was an improvement from readings of the six months prior.

Oanda Asia-Pacific senior market analyst Jeffrey Halley noted that "these numbers and their implications do not make for pretty reading", following "a dark and sombre tone from the International Monetary Fund on the global economy (on Wednesday)".

Mr Halley added the data emphasises that the "US-China trade dispute remains the single most crucial macro-economic factor for the world's economic health".

In Singapore, trading volume stood at 832.95 million securities, 71 per cent of the daily average in the first nine months of this year. Meanwhile, total turnover clocked in at $924.14 million, 87 per cent of the January-to-September daily average.

Across the market, decliners trumped advancers 226 to 159. Eighteen of the blue-chip index's 30 counters ended in the red. Led by City Developments's 5.2 per cent advance to $10.39, property plays were the main bright spots on the STI.

It was a mixed picture for Singapore's bellwether banking trio. DBS Group Holdings dipped 0.4 per cent to $24.94 and OCBC Bank edged down 0.1 per cent to $10.85. Meanwhile, United Overseas Bank closed at $26.02, up 0.1 per cent.

A version of this article appeared in the print edition of The Straits Times on October 18, 2019, with the headline 'Investors cautious amid global growth concerns'. Print Edition | Subscribe