Bulls & Bears

STI extends losses amid global uncertainties

Brexit, Europe virus surge and fading US stimulus hopes lead to downbeat mood

Investors around the region took flight yesterday on grim news surrounding Brexit, a resurgence in Covid-19 cases in Europe and the lack of progress on United States stimulus measures.

It was no surprise that the benchmark Straits Times Index (STI) took a hit and extended its losses from Wednesday. The index fell 31.97 points, or 1.25 per cent, to close at 2,523.62, with losers outnumbering gainers 271 to 167 on trade of 1.27 billion shares worth $1.28 billion.

Sembcorp Industries emerged top in the STI performance table, gaining 4.41 per cent to $1.42, followed by Keppel Corp, which inched up 1.34 per cent to $4.54.

The Singapore Exchange said yesterday that Keppel DC Reit, the largest stock on the STI reserve list as at Wednesday, is scheduled to join the index on Monday as CapitaLand Commercial Trust will be deleted in preparation for its merger with CapitaLand Mall Trust.

Meanwhile, Wilmar International was top decliner of the day among the STI constituents, shedding 6.44 per cent to $4.36.

The trio of local banks also ended the day in the red. OCBC Bank fell 1.26 per cent to $8.63, United Overseas Bank declined 1.22 per cent to $19.46 and DBS Bank retreated 1.17 per cent to $21.07.

Asian markets also ended down.

The Nikkei 225 Index slipped 0.51 per cent while the benchmark Kospi fell for a third straight session, closing down 0.81 per cent.

Shanghai stocks fell 0.26 per cent after Chinese President Xi Jinping's keynote address in Shenzhen on Wednesday failed to fuel the country's share rally.

Oanda senior market analyst Jeffrey Halley called the speech "heavy on rhetoric, but light on new initiatives and at the end, not market-moving for Asia at all".

The surge in infections in Europe is adding to the downbeat mood on trading floors given fears that governments will be forced to revert to tough measures that could deliver a blow to a tentative recovery from national lockdowns earlier this year.

"The European Covid-19 situation has been deteriorating again this week and more and more countries are introducing strict containment measures," said Gorilla Trades strategist Ken Berman.

"France, Spain, Italy, the UK, and Germany are all under pressure, and since the recent economic releases already showed worrisome trends, the contingent might be heading for a rough winter."

  • Additional information from Agence France-Presse
A version of this article appeared in the print edition of The Straits Times on October 16, 2020, with the headline 'STI extends losses amid global uncertainties'. Subscribe