SINGAPORE - The Singapore market on Wednesday (May 8) extended losses made in the early session on heightened jitters over a US threat to hike tariffs on Chinese goods on Friday that could dash investors's hopes for a trade deal.
Markets in Asia broadly rebounded on Tuesday following Monday's bloodbath but it was short-lived, with the Straits Times Index (STI) overturning Tuesday's 0.7 per cent gain to trade at 3,279.53, down 32.99 points or 1 per cent, as at 1.03pm on Wednesday.
Shortly after the afternoon session commenced, volume was heavy at 1.05 billion securities traded, 83 per cent of the full-day average over the first three months of 2019. Meanwhile, total turnover came in at $504.12 million.
Across the market, decliners outpaced advancers 220 to 114. Compared to the broader market, the benchmark index had 27 of the STI's 30 components trading in the red.
The local banks pulled back from gains made on Tuesday, were are all trading below Monday's closing prices.
DBS Group Holdings was trading $0.22 or 0.8 per cent lower at $26.55; OCBC Bank was $0.13 or 1.1 per cent lower at $11.44; and United Overseas Bank dropped $0.30 or 1.2 per cent to $25.70. OCBC is due to release its first quarter earnings on Friday.
Meanwhile, Yangzijiang Shipbuilding was the bluechip index's most traded, with 17.8 million shares changing hands. The shipbuilder is trading $0.02 or 1.3 per cent down at $1.51.
Across Asia, most markets were down. Japan fell by 1.8 per cent, Hong Kong dipped 0.7 per cent, Australia was down 0.5 per cent. Meanwhile, China and South Korea fared better, down 0.1 per cent and 0.2 per cent, respectively.
On Tuesday, the Dow Jones Industrial Average shed 1.8 per cent to close at 25,967.05 and the S&P 500 slid 1.7 per cent to 2,884.16. Meanwhile, the tech-rich Nasdaq Composite Index fared worst, tumbling 2.0 per cent to 7,963.57.
This came after US Trade Representative Robert Lighthizer told reporters that Washington will increase levies on Chinese imports on Friday.
"The fallout from Mr Trump's threat of an impending tariff-geddon this Friday gathered pace overnight," Oanda's senior market analyst, Jeffrey Halley, said, referring to the Wall Street selloff.
CMC Markets' Margaret Yang noted that even though the selloff in the US market on Tuesday was catalysed by trade tensions, global markets had been in need of a meanginful correction, after rallying since the beginning of the year. "The risk of profit-taking is building," she added.
A trader told The Business Times: "At present, it is probably best to stay on the sidelines. Investors who reduced positions in April and shortly after DBS released first-quarter results (April 29) are likely to be happy with their decisions but they will still feel jittery."
SPI Asset Management head of trading and market strategy, Stephen Innes, said in a morning note: "The sudden shift in the US trade policy is beginning to look less like a tactic to extract further compromises from China, as it now seems the US administration is hell-bent on applying more punitive tariffs which could upend the negotiations all together especially if President Trump decides to impose a flat 25 per cent across all Chinese products.