Bulls And Bears

STI down as red ink floods regional bourses

Disappointing data releases, cuts in US, China and euro zone forecasts blamed

A week can be a long time in the markets as this one showed, with Monday's optimism petering out into pessimism and gloom yesterday.

Hopes of a breakthrough in a trade deal between the United States and China cheered investors at the start of the week. That gave way to disappointing data releases, and cuts in economic growth forecasts from China and the US followed, but the hammer blow came when the European Central Bank slashed 2019 euro zone growth and inflation forecasts.

China's weakest export figures in three years weighed heavily on Asia's markets as well yesterday.

All these helped to send Singapore's Straits Times Index (STI) down 33.61 points or 1.04 per cent to 3,195.87 and 0.7 per cent off for the week.

Elsewhere in the region , markets were a sea of red with Australia, Japan, South Korea, mainland China, Hong Kong and Malaysia ending lower.

The Shanghai Composite had been the best performing benchmark index of the lot, thanks to Chinese fiscal stimulus measures announced earlier in the week, but it had its worst day in five months yesterday, tumbling 4.4 per cent.

Trading here came in at 1.11 billion shares worth $1.04 billion with losers outpacing gainers 267 to 143.

CWX Global, formerly known as Loyz Energy, was the bourse's most traded with 48.9 million shares changing hands. The stock finished flat at 0.3 cent with the total value of the trades at roughly $150,000.

Just three of STI's 30 constituents ended the day in the black. Yangzijiang Shipbuilding was the index's most traded with 29.2 million shares done. The shipbuilder ended 2.1 per cent lower at $1.39.

Among financials, DBS fell 1 per cent to $25.06, OCBC dropped 1.3 per cent to $11.05 while United Overseas Bank slipped 1 per cent to $24.91.

UOB Kay Hian and Lim & Tan Securities initiated coverage of Koufu Group with "buy" recommendations. The calls by the brokerages and the defensive nature of Koufu's business amid a global slowdown could have contributed to the shares closing 0.8 per cent higher at 67.5 cents.

IG market strategist Pan Jingyi noted that downturns often mean that defensive counters usually remain relatively resilient.

"However, in times when the growth outlook comes into question, the impact on the broad index does not spare defensive counters - like real estate stocks - that still depend upon the health of the Singapore economy to some extent."

A version of this article appeared in the print edition of The Straits Times on March 09, 2019, with the headline 'STI down as red ink floods regional bourses'. Print Edition | Subscribe