Bulls And Bears

STI hit by US tech rout, dashed vaccine hopes

S'pore bourse down 0.22%, with other Asian markets also closing lower

The Singapore bourse was on shaky ground with the key Straits Times Index trading underwater all of yesterday and paring some losses to finish 5.43 points, or 0.22 per cent, lower at 2,499.33, following an extended tech sell-off on Wall Street overnight.

Providing a double whammy was news that vaccine front runner AstraZeneca had paused clinical trials after a participant fell ill, dashing hopes of a Covid-19 vaccine that has been a big factor in the markets' recent rally.

Trading volume on the Singapore market totalled 1.46 billion shares worth $1.21 billion, higher than Tuesday's 1.3 billion shares worth $943 million.

Key Asian gauges across the board, from Japan, Hong Kong and China, to Taiwan, South Korea and Malaysia, posted losses, closing lower by between 0.4 per cent and 1.9 per cent. Australia was the hardest hit, falling 2.2 per cent.

The Nasdaq has lost 10 per cent over three straight sessions, and is spearheading a broad risk reduction across assets, including oil and gold, remarked Mr Stephen Innes of AxiCorp. Nevertheless, he pointed out that the tech-heavy index still remains at its loftiest at current levels, at 60 per cent higher than March's lows.

Analysts reckon that tech stocks are in the middle of a technical correction as fundamentally, there are no significant material changes that can be pinpointed for the rout.

The big question mark is the extent to which other asset classes such as bonds, precious metals and currencies will be hurt by this correction.

Mr Innes further cautioned: "Although the equities' weakness and, in particular, the tech sector, is making many headlines, do not underestimate the Brexit impact. Judging by the way British pound assets are trading on Tuesday, investors were far too complacent to the 'no-deal' tail risk."

On the home front, Raffles Education gained 18.7 per cent to close at 17.8 cents, following its trading resumption at 4pm. In filings, it announced that substantial shareholder Oei Hong Leong - the Singapore tycoon who has been trying to remove the company's founder Chew Hua Seng as chairman and chief executive - acquired two million shares for nearly $285,000 on Tuesday, raising his total holdings from 12.9 per cent to 13.05 per cent.

Sembcorp Marine topped the day's most actively traded list with about 209 million shares worth $38 million changing hands. The stock fell 1.6 per cent to 19 cents.

A version of this article appeared in the print edition of The Straits Times on September 10, 2020, with the headline 'STI hit by US tech rout, dashed vaccine hopes'. Print Edition | Subscribe