Market sentiment sags with spike in virus deaths

STI slips into the red after China updates, while bourses in rest of region end mixed

The declining rate of coronavirus deaths and new cases of infection that had lifted investor sentiment in recent days changed for the worse yesterday.

The mood switch came after the Chinese authorities started using a new method of diagnosis, which resulted in sharp increases in both the fatality count and the number of infected people in Hubei province, the epicentre of the outbreak.

With the spike suggesting that a bigger-than-expected crisis might be on the cards, AxiCorp chief market strategist Stephen Innes noted: "The Hubei update has initially hit like a tonne of bricks, given this is one of the market's biggest fears."

Singapore's Straits Times Index (STI) initially built on Wednesday's buoyant session - its best of the year - before slipping into the red, eventually settling at 3,220.09, down 3.28 points or 0.1 per cent.

Markets elsewhere were mixed. China, Japan, Hong Kong, Malaysia and South Korea all ended lower but Australia and Taiwan notched up gains.

Oanda Asia-Pacific senior market analyst Jeffrey Halley noted "the argument that it was a one-off adjustment versus the integrity of China's data collection" was ultimately what left regional stock markets in "somewhat of a limbo".

Yesterday's session here recorded trading volume of 1.49 billion shares worth $1.19 billion, with gainers and losers matched at 205 to 204.

Genting Singapore, which gained 1.1 per cent to 88.5 cents, was the benchmark's most traded with 41.2 million shares changing hands.

The casino operator reported on Wednesday that fourth-quarter net profit rose 4 per cent to $156 million, though revenue fell 9 per cent to $607 million. It foresees a first-half dip in earnings due to the impact the virus is having on tourist numbers.

Banking stalwart DBS Bank closed unchanged at $25.42 after reporting a 14 per cent rise in net profit to $1.51 billion for the fourth quarter. It expects a revenue hit of around 1 to 2 per cent in the 2020 fiscal year due to the virus outbreak.

Fellow STI heavyweight Singtel was among the main laggards. The telco fell 1.8 per cent to $3.28 after posting a 23.8 per cent fall in third-quarter net profit to $627.2 million.

While most property developers fell, Wing Tai Holdings managed to add 3 per cent to $2.03. On Wednesday, the firm reported a 61 per cent rise in second-quarter net profit to $26 million on higher unit sales.

Among penny plays, Catalist-listed OEL (Holdings) was one of the most active counters with 110.7 million shares traded. It added 11.5 per cent to 2.9 cents after confirming plans to diversify into early childhood childcare and health education as well as healthcare.

A version of this article appeared in the print edition of The Straits Times on February 14, 2020, with the headline 'Market sentiment sags with spike in virus deaths'. Subscribe