Bulls And Bears

STI continues drop amid coronavirus fears

Banks close lower but stocks related to healthcare outperform market

Asian equity markets continued their slide to start the week, with investors keeping a close eye on the fast-spreading coronavirus.

New cases of infection within China have slowed in the past week, but Mr Stephen Innes, AxiCorp's chief market strategist, noted that markets remain extremely concerned about an escalation outside of China, and this is holding back risk-friendly activity.

Singapore's Straits Times Index opened the week 1.3 per cent lower, but managed to claw back some of those losses to end yesterday's session at 3,163.15, down 0.6 per cent.

Elsewhere in the Asia-Pacific, Australia, Japan, Hong Kong, Malaysia, South Korea and Taiwan all ended lower. Bucking the trend was China's Shanghai Composite Index. Investors were encouraged by the Chinese authorities lifting some work and travel restrictions, which helped businesses to resume operations. The index added 14.52 points or 0.5 per cent to reach 2,890.49.

Oanda Asia-Pacific senior market analyst Jeffrey Halley observed that "most Asian markets opened much lower and recovered some of those initial losses".

He said: "It is, however, hard to see further gains occurring from here against the backdrop of the coronavirus. That is likely to be the theme of the week, as the economic damage is totalled up from the outbreak."

Trading volume in Singapore was 1.59 billion securities, 34 per cent over last year's daily average. Total turnover was $1.07 billion, in line with last year's intra-day mean. Decliners trumped advancers 266 to 160, with 13 of the benchmark's 30 counters ending in the red.

Medtecs International was the bourse's most-traded counter yesterday, adding 7.7 per cent to hit 11.1 cents; 263.2 million shares changed hands. Like Medtecs, the iEdge SG All Healthcare Index, which tracks all healthcare-related stocks in the Singapore market, outperformed the market, adding 6.21 points or 0.4 per cent to reach 1,440.35.

With the recent rush to stock up on groceries, investors added positions on supermarket operator Sheng Siong, which gained 4.1 per cent to $1.28.

The local banks closed lower. DBS Group Holdings fell 0.8 per cent to $25.11, OCBC Bank dropped 1.3 per cent to $10.72, while United Overseas Bank finished at $25.57, losing 1.5 per cent.

Food and beverage player ThaiBev, trading ex-dividend since Feb 7, edged down 1.3 per cent to 75 cents after CLSA downgraded it on near-term earnings pressure from its Thailand and Vietnam businesses.

A version of this article appeared in the print edition of The Straits Times on February 11, 2020, with the headline 'STI continues drop amid coronavirus fears'. Print Edition | Subscribe