Bulls And Bears

STI falls amid gloom in regional markets

Worries over trade, slowdown and HK protests, despite expected US rate cut

Local shares followed their regional counterparts into negative territory yesterday on concerns over trade, the global economy and the Hong Kong protests.

The Straits Times Index (STI) ended at 3,346.39, down 17.4 points or 0.5 per cent.

Stocks fell in China, Hong Kong, Japan, Malaysia and South Korea while Australia bucked the trend, up 0.5 per cent on the back of technology and financial plays.

Investors are also looking to the US Federal Reserve's monthly meeting tomorrow, when a decision to proceed with a rate cut is widely expected, noted CMC Markets analyst Margaret Yang.

That said, rate cut hopes are barely having an effect on market sentiment. Ms Yang said: "Although a Fed rate cut is supposed to be stock-positive, the prospect of one has long been fully priced in by equities."

Trading volumes here clocked in at 1.3 billion shares worth $888.14 million, with losers beating gainers 238 to 170.

Genting Singapore was the STI's most active, ending 0.5 per cent lower at 94 cents on trade of 19 million. The casino operator will report earnings after Friday's market close.

DBS Bank posted second-quarter earnings that beat expectations before yesterday's session started. The bank fell 0.9 per cent to $26.64.

The other banks also ended lower. OCBC Bank slipped 0.4 per cent to $11.71 and United Overseas Bank fell 0.7 per cent to $26.74.

Both are reporting earnings for the second quarter on Friday.

The impending US rate cut was another factor that market watchers attributed to the banks' laggard performance.

Singapore Exchange market strategist Geoff Howie noted that in recent years, net interest margin growth has corresponded with gradual increases of interest rates in Singapore and the United States.

This suggests that the converse might hold in the face of more central banks subscribing to rate cuts to curb growth slowdowns.

Property-related counters were mostly lower, as investors continued to book profits following June's rally, but there were exceptions.

City Developments Limited closed 1.3 per cent up at $9.61.

Interest in the counter picked up after 375 of 820 units in its executive condominium Piermont Grand were sold over the launch weekend.

Suntec Reit advanced 0.5 per cent to $1.93 following a number of upgrades by research houses.

Analysts are expecting an earnings turnaround due to positive rental reversions, likely to be sustained in the coming quarters.

A version of this article appeared in the print edition of The Straits Times on July 30, 2019, with the headline 'STI falls amid gloom in regional markets'. Print Edition | Subscribe