Bulls And Bears

STI down on reports of impending US tariffs

Bourse in the red after 3 days of gains last week; banks and Singtel among losers

The new week brought fresh pain for local stocks as the key Straits Times Index (STI) fell 20.02 points, or 0.63 per cent, to 3,141.40 after three days of gains last week.

Amid reports that US President Donald Trump was preparing to level a fresh salvo of US$200 billion (S$274 billion) in tariffs this week, the STI fell into the red for the first time since last Tuesday.

He is likely to announce the new tariffs as early as the end of Monday, a senior administration official told Reuters last Saturday.

Mr Trump's plan comes at a time when his Treasury Secretary Steven Mnuchin is attempting to restart trade talks with another bilateral meeting this month.

Investors are probably tired of the "talk-tariffs-threat-talk again" cycle hitting media headlines for months, noted CMC Markets analyst Margaret Yang. "The markets are probably not as sensitive to bad trade news as they did a few months ago. Therefore, the downside is likely to be limited," she said.

The Hang Seng sank 1.3 per cent on Mr Trump's tariffs and damage from Typhoon Mangkhut over the weekend, while the Shanghai Composite Index shed 1.1 per cent to its lowest close since 2014.

On the local bourse, losers outnumbered gainers 243 to 145, on turnover of some 1.83 billion shares worth $712.2 million.

The most actively traded counter yesterday was oil field equipment supplier Rex International with 126.35 million shares traded, rising 10.1 per cent to 10.9 cents.

The firm had yesterday received "unsolicited, non-binding" indications of interest in the portfolio of licences held by a subsidiary from unrelated third parties. Its board said it was "carefully considering" the interest, but cautioned there was no guarantee it would lead anywhere.

Other actives included AusGroup with 33.97 million shares traded, down 2.1 per cent to 4.6 cents, and BlackGold Natural Resources with 20.59 million shares traded, down 3.85 per cent to 2.5 cents.


Meanwhile, all three local banks ended the day in the red. United Overseas Bank fell the most among the trio by 1.3 per cent to $25.97. OCBC Bank ended the day 1.1 per cent lower at $11.05, while DBS dipped just 0.2 per cent to $24.79.

Singtel also saw its share price dented despite announcing a new growth avenue: e-sports. It laid out plans for doing battle in the e-sports arena as a way of drawing millennials to its services. Despite this, it dipped 1.3 per cent to $3.11, with trading of 11.02 million shares.

A version of this article appeared in the print edition of The Straits Times on September 18, 2018, with the headline 'STI down on reports of impending US tariffs'. Print Edition | Subscribe