Possible delay in US tax cut deal dampens stocks

The Straits Times Index lost 20.04 points or 0.59 per cent to 3,399.09 on Tuesday (Nov 14).
The Straits Times Index lost 20.04 points or 0.59 per cent to 3,399.09 on Tuesday (Nov 14).PHOTO: ST FILE

The slow start to the week for Singapore and regional markets continued for a second day on the back of growing concerns that the already delayed Umited States tax cuts could be further pushed back.

The benchmark Straits Times Index (STI) lost 20.04 points or 0.59 per cent to 3,399.09 on Tuesday after hitting an intraday high of 3,422.46.

Turnover came in at 2.6 billion shares worth $1.7 billion with losers trumping gainers 322 to 149.

Elsewhere shares in Tokyo, Seoul, Hong Kong and Sydney were down while New Zealand rose.

A broad-based moderation in Chinese data also added to investor uncertainty.

DBS Group Research economist Nathan Chow noted that growth in China's industrial production declined to 6.2 per cent year-on-year from 6.6 per cent in September.

"The slowdown was mainly attributed to air-pollution curbs. Regulators recently ordered steel mills and aluminium factories to curtail production, which affected wide swaths of the country's manufacturing sector," Mr Chow said.

Market movers UOB, Singtel, Wilmar International, Keppel Corporation and OCBC wiped out more than 13 points from the index here.

In particular, Wilmar International, which posted a 5.7 per cent year-on-year fall in net profit to US$370 million, lost 13 cents to $3.19 on a volume of 18.2 million.

OCBC maintained its "hold" call on the stock but lowered the target price from $3.66 to $3.51.

"Management expects the good performance in the oilseeds and grains segment to continue into (the fourth quarter). Performance of the other major business segments is expected to be 'satisfactory'," the research house said.

Malaysian property developer Capital World was actively traded, adding 0.5 cent to S$0.098 on a volume of 23.8 million units.

Cosco Shipping International remained active, up four cents to $0.585 on a volume of 104.6 million.

Global Logistic Properties was in demand as well, with 76.6 million units changing hands as it fell one cent to $3.32.

US Federal Reserve Chair Janet Yellen, Bank of England governor Mark Carney and Bank of Japan governor Haruhiko Kuroda were in Frankfurt on Tuesday for talks hosted by European Central Bank president Mario Draghi.

Mr Philip Wee, foreign exchange strategist at DBS Group Research, noted that the changing of guard at the world's top central banks over the next couple of years "mark a shift from monetary policy divergences towards convergence", likely in the latter half of 2018.

Mr Rob Carnell, ING's head of research for Asia, said news flow about the US tax reforms and guidance on G3 monetary policy would determine the course for global markets for the rest of the week.