Wuhan virus concerns weigh on sentiment

Singapore stocks slumped further yesterday, in line with most regional markets, as the emergence of a new virus from China and a sluggish economic outlook weighed on sentiment.

The Straits Times Index was down 1.09 per cent after lunchtime, but eventually regained some ground to close at 3,247.17, down 1 per cent or 32.92 points.

Decliners outnumbered advancers 350 to 138, or about three counters down for every one on higher ground. Trading remained active, with 2.67 billion securities worth $1.11 billion changing hands.

Mr Linus Loo, head of research at Lim & Tan Securities, told Reuters yesterday that concerns over the spread of the coronavirus in China affected market sentiments.

"Unfortunately, it's coming at a bad time because it's the travel season in China ahead of the (Chinese) New Year celebrations," he said.

CMC Markets analyst Margaret Yang also thinks markets "priced too little in", in terms of the virus spreading across multiple Asian cities, originating from Wuhan, in a situation that harks to the Sars outbreak of 2003.

In addition, the current situation may be worsened by the millions of people travelling across China for the Spring Festival , she said.

Adding to investors' worries was the International Monetary Fund, which had trimmed its growth forecasts for 2019 and 2020 to 2.9 per cent and 3.3 per cent overnight, in the light of a global economic outlook which it said remained sluggish.

All the local benchmark's constituents closed in the red yesterday, save for Mapletree Logistics Trust. The real estate investment trust, trading cum dividend, was up 0.55 per cent at $1.82. This came after it posted a higher distribution per unit quarter on quarter, on Monday evening.

In a report yesterday, Jefferies maintained its "hold" rating on Mapletree Logistics Trust but raised its target price from $1.40 to $1.55, factoring in the trust's recent acquisitions and placement.

Otherwise, declines among the blue-chip counters were led by financials and industrials.

Shares of DBS slid 0.3 per cent to $26.30, while United Overseas Bank lost 0.64 per cent to $26.48. Likewise, OCBC shares shed 0.45 per cent to $11.12.

Also among the decliners were Jardine-linked stocks, with Jardine Cycle & Carriage slumping 1.99 per cent to $30.50.

Jardine Strategic Holdings went down 1.48 per cent to US$32.70. Meanwhile, Jardine Matheson Holdings' counter tumbled 0.97 per cent to US$57.50.