A thaw in trade tensions between the United States and China lent hope to local equities yesterday, although some of the rosiness evaporated over the course of the day.
The benchmark Straits Times Index (STI) slid from a morning peak to finish up 18.96 points, or 0.54 per cent, to 3,548.23. However, losers beat gainers 201 to 193 on the full bourse, as 1.28 billion shares changed hands for $1.04 billion.
Winners on the index included Venture Corporation, which gained 56 cents, or 2.64 per cent, to $21.76.
Singapore Airlines ended up 12 cents, or 1.04 per cent, to $11.68.
Some cheer came from US-China trade talks. US Treasury Secretary Steven Mnuchin said on Sunday the trade war was "on hold", referring to the tariffs announced in March.
Wilmar International, an index agribusiness that had been fretting over the impact of soya bean tariffs on its Chinese operations, added two cents, or 0.62 per cent, to $3.25.
Technology stock Hi-P International, which has six manufacturing facilities in China, put on five cents, or 3.68 per cent, to $1.41.
With the scuppered Iran disarmament deal unresolved, oil's firm footing above US$70 continued to give a lift to energy stocks.
In the industrial real estate investment trust (Reit) arena, last Friday's proposal to merge ESR-Reit and Viva Industrial Trust (VIT) pushed ESR-Reit down one cent, or 1.91 per cent, to 51.5 cents. VIT advanced one cent, or 1.12 per cent, to 90 cents.
The move would see the ESR-Reit manager run the enlarged trust, with VIT to be delisted. "We deem the terms are 'principal-positive' for VIT unit holders," said OCBC analyst Deborah Ong. "Overall, our estimate implies that one VIT unit can be traded for an aggregate value of at least $0.942."
UOB research head Suan Teck Kin and senior economist Alvin Liew said "markets will be relieved (by) the positive conclusion" of the US-China talks. "The de-escalation of trade frictions will remove one key near-term risk undermining the current synchronised growth path of the global economy and should be a stabilising factor for the current global trade arrangement."
Morgan Stanley noted that China agreed to cut the US trade deficit by raising its purchases of American goods, which "could lead to increasing competition for countries with leading market shares" in products such as liquefied natural gas.
IG Asia market strategist Pan Jingyi said "Asian markets are expected to be supported into the week's open with the reduction of risk" from the trade talks, adding that a 3,520-point support level is "in question" with the STI.
