Markets across Asia ended markedly lower yesterday as the US dollar gained on strong economic data and Chinese markets plunged, despite central bank efforts to shore up an economy dragged down by an ongoing trade war.
In a sign of growing concern over United States-China ties, foreign investors dumped 9.7 billion yuan (S$2 billion) of A shares in the Chinese markets' first session after a week-long break.
The massive sell-off came even as the People's Bank of China announced over the weekend that it would cut its reserve requirement ratio for selected lenders for the fourth time this year, freeing up about 1.2 trillion yuan in liquidity.
The Shanghai Composite Index lost 3.7 per cent, its biggest loss since June, while Hong Kong's Hang Seng closed 1.4 per cent lower. South Korea's Kospi index lost 0.6 per cent, and Australia's ASX 200 slid 1.4 per cent to end near a four-month low.
In Singapore, the key Straits Times Index closed at 3,181.45, below its support level of 3,200, having lost 28.34 points, or 0.88 per cent, in the session.
About 1.8 billion shares worth $1.08 billion changed hands, compared with 1.5 billion shares worth $936.2 million last Friday. Losers outnumbered gainers 292 to 103.
Among heavily traded stocks, Chip Eng Seng lost 9.5 cents, or 10 per cent, to end at 85 cents.
The construction and property firm announced last Friday night that seven of its shareholders had entered into an agreement to sell about 186.1 million shares, amounting to 29.73 per cent of its total issued shares, to Ms Celine Tang, managing director of property developer SingHaiyi Group. The firm said the agreement was expected to be completed on or before Oct 9.
Singtel said yesterday that it has signed a memorandum of understanding with its subsidiary Optus and its regional associates to grow the gaming and e-sports ecosystem in South-east Asia, Australia and India. Singtel shares closed down one cent, or 0.3 per cent, to $3.20 after the announcement.
The US dollar rose to $1.385 against the Singapore dollar yesterday evening after a bond sell-off last Friday sent yields soaring to 3.23 per cent and the non-farm payrolls report revealed that the US unemployment rate fell to 3.7 per cent last month.
The Monetary Authority of Singapore will release its October monetary policy statement on Friday, with most analysts expecting it to tighten policy via a slope increase.