Bulls And Bears

STI ends flat after early momentum fizzles out

US tariff delay gives rise to early gains, but weak China data dampens mood

US President Donald Trump's concession on tariffs sparked a strong session on Wall Street that rolled over to Asian bourses yesterday.

The Straits Times Index (STI) made the most of it, opening 0.8 per cent higher, but failed to sustain the momentum and ended at 3,147.60, up 0.87 point or 0.03 per cent.

Disappointing Chinese economic data killed the mood and left investors concerned over political and economic issues.

Shares in Australia, China, Hong Kong, Japan, Malaysia and South Korea all rose. But, like the local market, early gains were trimmed.

Mr Eli Lee, Bank of Singapore's head of investment strategy, said Washington's move signalled concerns over the latest tariffs' impact on the US consumer and economy.

"By pushing some tariffs to Dec 15, beyond the key Christmas buying season, the US is looking to alleviate some of these economic headwinds, at least over the near term."

US and Chinese officials have also agreed to hold talks in two weeks.

Trading volumes here clocked in at 1.04 billion shares worth $1.28 billion, with gainers outpacing losers 219 to 195.

Yangzijiang Shipbuilding's trading halt has not been lifted, but the firm said after market close that its executive chairman is assisting Chinese officials in an investigation.

Singtel, which dipped 0.6 per cent to $3.16, was the STI's most traded with 40 million shares changing hands. The telco has fallen 4 per cent since posting a 35 per cent drop in first-quarter net profit last Thursday.

Wilmar International shed 4.7 per cent to $3.86. The agri-business said on Tuesday that second-quarter earnings halved, missing estimates, as African swine fever in China affected demand for soya bean meal.

Wilmar was one of the STI's top gainers last month, as institutional investors snapped up shares on the back of its Chinese unit's potential listing in Shenzhen. This bid will likely dictate interest in the counter.

Citi Research analyst Patrick Yau noted: "Wilmar's stock price trend has moved away from tracking palm oil prices since early 2019 as the planned IPO (initial public offering) of its Chinese unit progresses. Despite these soft results, this event remains a catalyst."

Among the cyclically sensitive semiconductor counters, AEM Holdings added 1.8 per cent to $1.11 with 11.2 million shares traded.

The banks reversed Tuesday's losses. DBS Bank was up 0.7 per cent to $24.99, OCBC Bank added 0.9 per cent to $11.10, and United Overseas Bank put on 0.6 per cent to $25.90.

A version of this article appeared in the print edition of The Straits Times on August 15, 2019, with the headline 'STI ends flat after early momentum fizzles out'. Print Edition | Subscribe