Bulls And Bears

STI dips on investor caution over pandemic

Markets look to earnings season that kicks off this week, China's Q1 GDP data

Investors played it safe yesterday as concerns continue to swirl around the pandemic and what its longer-term effects might be.

The disquiet among traders left the Straits Times Index (STI) down 4.07 points or 0.16 per cent to 2,567.25, with losers outpacing gainers 204 to 178. There were 789.43 million shares worth $713.63 million traded.

There was less demand for equities in Asia, given that traders are still erring on the side of caution as "markets will have a lot to tussle with over the week ahead", said Mr Stephen Innes, AxiCorp's chief global markets strategist.

This includes the earnings season that kicks off this week, which may give investors "a better sense of how bad the hit to global profits" wrought by the coronavirus outbreak could be, said a report by OCBC Investment Research.

Investors are looking out for China's first-quarter gross domestic product figures.

Bourses elsewhere were mostly down, with China, Malaysia, Japan and South Korea posting losses. Tokyo closed 2.3 per cent lower on the back of a stronger yen and investor disappointment over a lack of asset-buying from the Bank of Japan. Shanghai dipped 0.5 per cent, while Hong Kong, Sydney and Wellington were closed for a public holiday.

This comes despite the historic Opec+ deal to slash oil output by 9.7 million barrels per day (bpd), with investors being more focused on the economic uncertainty caused by the pandemic, said market watchers.

However, the oil output cut was below expectations of a 20 million bpd cut, according to Mr Suria Dharma, head of equity research at Samuel Sekuritas Indonesia.

"People are still concerned with Covid-19," Mr Dharma added.

Around half of the STI's constituents ended in the red, with Mapletree Logistics Trust emerging at the bottom, falling 4.07 per cent to $1.65.

The best performer was Yangzijiang Shipbuilding, which gained 2.17 per cent to 94 cents.

Meanwhile, the most heavily traded stock was Singtel, which edged up 1.11 per cent to $2.74.

The bank stocks were down in the early session, but DBS and UOB built on gains by late morning to end in the black. DBS gained 0.73 per cent to $19.28, while UOB added 0.05 per cent to $20.18, but OCBC fell 0.34 per cent to $8.92.

The banks have received increasing numbers of applications to defer payments or seek assistance to cope with the pandemic fallout.

Additional reporting by Agence France-Presse

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A version of this article appeared in the print edition of The Straits Times on April 14, 2020, with the headline STI dips on investor caution over pandemic. Subscribe