Bulls And Bears

Outlook dims as hopes of US-China deal fade

Grim economic data from China adds to gloom; STI loses 0.27% on thin trade

Market excitement over a supposed US-China trade deal petered out yesterday in the wake of analyses that called the promises "meaningless" and just "low-hanging fruit" that China has offered before.

"China dodges more tariff hikes and gets more pork and soya beans (which) it needed anyway; the Americans get less angry farmers in crucial voting states," said Mr Jeffrey Halley, senior market analyst for Asia-Pacific at Oanda.

"Everyone's a winner, but everything stays the same, as no progress on the hard stuff has occurred."

China's trade data for last month, released yesterday, further darkened the outlook. It showed a quickening slide in exports, continued contraction in imports and factory prices declining at the fastest pace in more than three years.

Key indices in China snapped a five-day winning streak on the back of the dire economic news, and Hong Kong ended lower as well.

South Korea closed flat while Australia and New Zealand eked out some small gains.

The Straits Times Index (STI) edged down 0.27 per cent or 8.28 points to 3,116.17. Trading was thin, with just 975.8 million securities worth $728.8 million changing hands, and losers outnumbering gainers by 191 to 165.

But Japan's Nikkei index surged nearly 2 per cent to a near six-month high.

At home, Golden Agri-Resources was the top traded counter, on 62.9 million shares. The palm oil giant surged as much as 7.1 per cent at the opening, the most since July 1, before tapering off to close at 21.5 cents, up 2.38 per cent.

It was followed by Y Ventures, which gained 4.46 per cent to 11.7 cents on volume of 28.4 million.

Real estate investment trusts (Reits) contributed a fair bit to trading volume, led by CapitaLand Mall Trust, which fell 1.14 per cent to $2.60 with 11.4 million units done.

It was joined by Mapletree North Asia Commercial Trust, down 2.36 per cent to $1.24 with 10.8 million units traded, and Ascendas Reit, down 1.27 per cent to $3.11 after 9.2 million units changed hands.

Keppel Infrastructure Trust (KIT) gained 0.92 per cent to 55 cents. It reported a distribution per unit of 0.93 cents for the third quarter on Monday. DBS research analyst Suvro Sarkar noted that KIT's acquisition of Australian chemicals group Ixom in the first quarter "diversifies the asset base, stabilises net asset value decline, lengthens the effective life of the trust, and creates organic growth potential, which was largely missing till now".

A version of this article appeared in the print edition of The Straits Times on October 16, 2019, with the headline 'Outlook dims as hopes of US-China deal fade'. Print Edition | Subscribe