STI down 0.6% ahead of Q1 earnings season

The Straits Times Index closed down 16.75 points, or 0.64 per cent, at 2,597.85 yesterday, snapping two days of consecutive gains as Singapore corporates head into the first-quarter earnings season.

A general cautious tone echoed through the region as investors also stepped into a busy US corporate earnings week, which is set to reveal the degree of damage Covid-19 has inflicted on businesses.

The United States, which has by far the world's largest number of confirmed coronavirus cases, with more than 765,000 infections and over 40,600 deaths, kicked off earnings season last week with Wall Street banks.

"The significant amount of uncertainties and the lack of comparative incidents to assess the Covid-19 impact limit the visibility with earnings," Ms Pan Jingyi, market strategist at financial services firm IG, said in a note.

In Asian markets, "caution can likewise be seen setting in awaiting the series of US earnings updates", she added.

Regional markets were mixed. The Hang Seng fell 0.2 per cent, Kuala Lumpur Composite rose 0.4 per cent, Nikkei fell 1.2 per cent and Shanghai Composite rose 0.5 per cent.

Sydney shed 2.5 per cent and Seoul dropped 0.8 per cent.

"The longer investors have to contemplate future economic issues while they wait for more countries to be on the downward slope of the pandemic curve, the more scope there is of risk assets pricing in a difficult future," said Mr Chris Iggo of AXA Investment Managers UK.

In Singapore, about 1.18 billion securities worth $1.09 billion changed hands. Losers outnumbered gainers 223 to 211.

Biolidics was the most active counter, rising 20.6 per cent to 38 cents on a volume of 61.2 million shares.

The Singapore-based cancer diagnostics company said yesterday morning that it can now distribute, market and sell its Covid-19 rapid test kits in the US.

The top loser was Jardine Matheson, which fell 4.1 per cent to US$51.48. The top gainer was UOI, which rose 4.1 per cent to $6.67.

Meanwhile, oil prices collapsed to more than two-decade lows yesterday as traders grew concerned that storage facilities were reaching their limits.

In early trading in New York, West Texas Intermediate fell to as low as US$10.96 a barrel, the weakest level since 1998.

Analysts said this month's agreement between top producers to slash output by 10 million barrels a day was having little impact on the oil crisis because of lockdowns and travel restrictions that are keeping billions of people at home.

THE BUSINESS TIMES, REUTERS, AGENCE FRANCE-PRESSE