Markets Insights

Jittery start to week as markets tread cautiously

Hurricane Irma's arrival on the Florida coast over the weekend drove more than seven million people from the state seeking shelter. Markets will be monitoring the impact of the storm, which left a trail of death and destruction across the Caribbean.
Hurricane Irma's arrival on the Florida coast over the weekend drove more than seven million people from the state seeking shelter. Markets will be monitoring the impact of the storm, which left a trail of death and destruction across the Caribbean.PHOTO: REUTERS

Sentiment still weak as impact of Hurricane Irma adds to worries over Korean peninsula

Markets are off to a wobbly start this week on the back of mounting geopolitical tensions on the Korean peninsula and the devastation caused by hurricanes in the United States.

Hurricane Irma's arrival on the Florida coast over the weekend, combined with lingering fears about the ramifications of North Korea's recent missile tests, mean investors are starting the week on a nervous note.

Investors flocked to safe-haven assets like gold and US Treasuries last week as US stock indices closed mostly down.

The uncertainty weighed on Asian markets including Singapore, with the Straits Times Index falling over 1.6 per cent over the week.

Geopolitical concerns will likely remain a concern for markets this week, said IG market strategist Pan Jingyi.

"As with any provocative act by North Korea of late, watch also for the series of reaction from neighbouring countries and the US, and in turn the impact upon equity markets in the week," she added.

UNEASY PERIOD

As with any provocative act by North Korea of late, watch also for the series of reaction from neighbouring countries and the US, and in turn the impact upon equity markets in the week.

IG MARKET STRATEGIST PAN JINGYI, on geopolitical concerns affecting sentiment.

Markets will also be monitoring the impact of Hurricane Irma, which began lashing Florida yesterday after leaving a trail of death and destruction across the Caribbean.

More than seven million people were evacuated from the state, with tens of thousands huddling in shelters. At least 170,000 homes were without power as the storm unleashed deadly winds and rain.

Hurricane Irma ranks as one of the most powerful Atlantic storms in a century and comes hot on the heels of Harvey, which brought unprecedented, tragic flooding to the Houston area.

JP Morgan believes the cost of the two hurricanes will exceed US$260 billion (S$349 billion).

Closer to home, the focus will be on a slew of China economic indicators due out on Thursday, including August retail sales, industrial production and fixed asset investments.

"The industrial production (numbers) may offer insights into factory performances and in turn, views on the manufacturing sector's performances. This could, in turn, have an impact upon Asian bourses," said Ms Pan.

The uptick in China's economy over the past few months bodes well for the country's leadership ahead of a once-every-five-years congress of the Communist Party, which will open on Oct 18.

Meanwhile, a slew of Singapore property market data is due out this week, including the SRX Property non-landed private residential index out on Tuesday; SRX Property private and HDB rental indices on Wednesday; and private home sales data out on Friday.

The property market sentiment has been picking up after a lengthy slump, amid a resurgent en bloc market and strong interest in new launches.

A version of this article appeared in the print edition of The Straits Times on September 11, 2017, with the headline 'Jittery start to week as markets tread cautiously'. Print Edition | Subscribe