Bulls And Bears

STI slips despite overnight Wall St rally

Investors take cue from Asian markets, mostly down on fresh US-China tensions

Local shares fell yesterday despite Wall Street's overnight rally which was triggered by rising expectations that United States Federal Reserve chairman Jerome Powell will outline a new set of expansionary policies in an upcoming speech.

Investors here seemed more inclined to take their lead from other markets in the region, which also mostly trended down.

The end result was a fall of 0.88 per cent or 22.27 points, leaving the Straits Times Index (STI) at 2,519.81. Losers outpaced gainers 256 to 199, with 2.53 billion shares worth $1.2 billion changing hands.

ComfortDelGro was again the best-performing counter on the STI, rising 2.7 per cent to $1.50. It was also the most heavily traded stock with 28 million shares changing hands.

Next in line was Wilmar International, which was up 1.8 per cent to $4.43. The agri-food giant has obtained a $200 million corporate loan pegged to the Singapore Overnight Rate Average.

Only two other STI constituents ended the day in the black. Thai Beverage edged up 0.8 per cent to 61 cents while Genting Singapore rose 0.7 per cent to 70.5 cents.

The STI's laggards were Singapore Airlines (SIA) and the real estate investment trusts (Reits) and business trusts. SIA found itself at the bottom of the table, falling 3.5 per cent to $3.63.

Following right behind were Mapletree Commercial Trust, CapitaLand Commercial Trust, Mapletree Logistics Trust, CapitaLand Mall Trust and Ascendas Reit.

The STI's performance was in line with that of most exchanges amid fresh United States-China tensions, which AxiCorp chief global markets strategist Stephen Innes said had "clouded overall sentiment in Asia".

Hong Kong stocks slipped 0.83 per cent, South Korean shares fell 1.05 per cent as the central bank sharply downgraded its economic outlook, while Tokyo dipped 0.35 per cent.

Shanghai bucked the trend, rising 0.61 per cent, as did Australian shares, which endured a turbulent session before closing ahead by just 0.16 per cent.

Escalation of US-China tensions is expected after Beijing fired four missiles into the disputed South China Sea. US sanctions on several Chinese firms linked to the disputed region have added to the sour mood.

Meanwhile, investors here and across the world will be keen to decode Mr Powell's speech that was due last night, Singapore time.

Oanda senior market analyst Jeffrey Halley noted: "Financial markets are expecting the chairman to hint at lower rates for longer and, most importantly, to allow inflation targets to overshoot to get the average inflation up."

A version of this article appeared in the print edition of The Straits Times on August 28, 2020, with the headline 'STI slips despite overnight Wall St rally'. Print Edition | Subscribe