Bulls And Bears

STI weighed down by US-China tensions

Investors wary of risks as China's growth cools amid trade row with US

Local shares ended in the red for the second straight day on the back of rising tensions between the United States and China.

Investors here and across the region fear that cooling economic growth in China amid its trade spat with the US is posing risks.

The tensions sent the Straits Times Index (STI) down 0.6 per cent, or 18.2 points, to 3,225.72 on overall turnover of 2.24 billion shares worth $1.09 billion. Losers outnumbered advancers 229 to 156.

The Hang Seng in Hong Kong fell 0.9 per cent, Malaysian stocks ended flat and South Korea's Kospi dipped 0.07 per cent while Japan's Nikkei inched up 0.09 per cent. Taiwan's Taiex closed 0.05 per cent lower.

DBS Group Research analyst Yeo Kee Yan said the STI's decline could have prompted some profit-taking given the market's bounce in recent sessions. "Swings - be it up or down - can be sudden and wide on intra-day basis given the light trading activity," Mr Yeo noted. "Our view is that the STI continues to be range bound from 3,200 to 3,350 in the weeks ahead."

The broad sell-off here in banks, and the offshore and marine, electronics and property sectors was probably a reflection of rising trade risk and capital flowing out of emerging markets, said CMC Markets analyst Margaret Yang.

She warned that the tumbling Argentine peso could trigger a renewed wave of an emerging market currency rout similar to that of the Turkish lira recently.

Rex International was among the most actively traded counters by volume, with 106.4 million shares changing hands, before it ended flat at 7.1 cents.

Singtel was also heavily traded, with 37.42 million units done. It ended the day up 1.88 per cent, or six cents, to $3.26.

The telco shrugged off news that Vodafone Hutchison Australia and TPG Telecom intend to merge into a A$15 billion (S$15 billion) telecommunications giant to take on key rivals Telstra and Optus, Singtel's Australian subsidiary.

TPG Telecom must first obtain regulatory approval before splitting its Singapore mobile business from the rest of the company, the Info-comm Media Development Authority of Singapore said.

Fellow telco StarHub was up 2.47 per cent to $1.66 after the news, while M1 fell 1.25 per cent to $1.58.

In the property sector, CapitaLand gained 0.29 per cent to $3.44 after announcing it had bought a 60,732 sq m prime residential site in Ho Chi Minh City for $81.4 million in cash, highlighting its overseas ambitions.

A version of this article appeared in the print edition of The Straits Times on August 31, 2018, with the headline 'STI weighed down by US-China tensions'. Print Edition | Subscribe