Bulls And Bears

STI falls as markets attempt to find direction

Day's most active counters are Reits, which account for a third of the turnover

It was a mixed day for local shares as investors continued to get a handle on the shifting nature of the United States-China trade talks.

That said, real estate investment trusts (Reits) traded decidedly higher yesterday after US Federal Reserve chairman Jerome Powell said the central bank is likely to hold interest rates in the coming months.

The end result was a second straight session of losses for the Straits Times Index (STI), which closed down 12.78 points, or 0.4 per cent, to 3,207.85, weighed down by Singtel and some Jardine counters.

Elsewhere, regional markets were mixed. Australia, Japan and Taiwan closed up, China barely moved, but Hong Kong, Malaysia and South Korea ended in the red.

Beijing's move at the weekend to consider raising penalties on intellectual property theft - a key issue obstructing a trade pact - gave market participants hope that a mini trade deal could be signed sooner.

But markets appeared to struggle for direction, with observers noting that an air of caution remains as both sides have again failed to provide details of where talks were at.

"We are, of course, only one negative headline or tweet away from the sentiment turning on its tail, but for now, all is good with the world," Oanda Asia-Pacific senior market analyst Jeffrey Halley said.

Local market participants were lifted by sentiment that the manufacturing sector may be heading up after factory output unexpectedly grew 4 per cent year on year last month. This beat street expectations of a 1.4 per cent fall and outstripped September's revised figure of 0.7 per cent growth.

Trading volume here came in at 2.34 billion shares worth $2.63 billion, with losers outpacing gainers 196 to 189.

Golden Agri-Resources was the STI's most active, closing 4.5 per cent lower at 21 cents with 852.4 million shares changing hands. That was 14 times the average over the previous 15 trading days.

Volumes shot up after the agribusiness was dropped from the MSCI Singapore Index yesterday to be replaced by Mapletree Commercial Trust, which rose 1.3 per cent to $2.43 on trade of 202.4 million.

Much of the action here was on Reit counters, which accounted for a third of the turnover. The iEdge S-Reit Index added 1 per cent to 1,437.13, its best showing since Sept 4. Meanwhile, Keppel Reit added 2.5 per cent to $1.24, its best trading day since Dec 18 last year.

Reits lost some shine mid-year after yields started to get compressed following strong interest by investors when the US Fed first lowered rates.

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A version of this article appeared in the print edition of The Straits Times on November 27, 2019, with the headline STI falls as markets attempt to find direction. Subscribe