Bulls And Bears

S'pore bourse dips in line with Asian markets

Covid-19, advance GDP estimates weigh on local sentiment despite pharma lift

Regional markets were broadly slower yesterday following an overnight dip in United States technology heavyweights that weighed on the S&P 500 index.

Sentiment here was also dampened by advance estimates showing that second-quarter gross domestic product shrank 41.2 per cent from the first to the second quarter compared with a 3.3 per cent contraction in the first three months of the year.

That sober reminder of the impact Covid-19 is having on the economy helped send the Straits Times Index (STI) drifting through the day to end at 2,620.19, a decline of 10.89 points, or 0.41 per cent. Losers beat gainers 359 to 140, with 1.72 billion shares worth $1.12 billion changing hands.

Only four of the STI's component stocks closed in the black. Singtel was the most significant, ending the day at $2.52, up 0.8 per cent.

Singtel said earlier this month that its Australian unit Optus will launch its 11th satellite deployed for Australia and New Zealand in 2023.

It also recently said it would liquidate its video-streaming unit Hooq, which has Sony and Warner Brothers as co-owners. South Korean e-commerce giant Coupang is reportedly planning to buy Hooq's assets.

Among the smaller cap stocks, there was excitement around pharmaceutical plays.

Hyphens Pharma International closed at 48 cents, up 50 per cent. The firm said on Monday its patent for Ceradan Advanced, an emollient therapy formulated for eczema-prone skin, has been granted in Britain. The patent is also pending approval in 13 other jurisdictions.

iX Biopharma shares took off in the afternoon to close at 31.5 cents, up 26 per cent. Two weeks ago, it reported "robust uptake" in Australia for a product called Xativa since its April launch. Xativa is a medicinal cannabidiol in a wafer.

Broad sentiment was hit after the number of coronavirus infections around the world touched 13 million on Monday.

South Korea closed down 0.11 per cent, even as its government launched a 114.1 trillion won (S$131.8 billion) plan to create jobs and help the economy recover from the pandemic fallout, anchored in part by "green" investment in electric vehicles and hydrogen cars.

Japan closed 0.87 per cent lower, while Hong Kong shed 1.14 per cent. Australia ended 0.61 per cent down.

"There is a risk that the divergence between a gloomy economic outlook and unexpectedly strong returns from equity markets is reconciled by some pullback in asset prices rather than a surge in economic optimism," Mr Chris Iggo of AXA Investment Managers told Agence France-Presse. "There is a case for caution."

A version of this article appeared in the print edition of The Straits Times on July 15, 2020, with the headline 'S'pore bourse dips in line with Asian markets'. Subscribe