Local investors found nothing much to inspire them yesterday with Chinese manufacturing data disappointing while United States-China trade talks seem to drag on.
With such a downbeat mood, it was no surprise the Straits Times Index dipped 0.05 per cent or 1.49 points to 3,188.68. Losers outweighed gainers 201 to 171 on trade of 1.21 billion shares worth $954.13 million. The benchmark lost 0.42 per cent for the week.
The mood was muted across most of Asia as well. A private survey on China's manufacturing sector yesterday showed that factory activity contracted last month, which some analysts said underscored the importance of striking a trade deal.
Both Washington and Beijing said the talks yielded progress but did not give details.
"The talks did not result in any negative headlines. Expectations for a sweeping deal were low to begin with and the market is probably relieved that trade tensions are no longer escalating," said DBS Group Research in a client note.
Hongkong Land contributed to the losses here, closing down 4.74 per cent at US$6.83 while Venture Corp pared 2.34 per cent to S$15.88.
Financial stocks also felt some pain, with OCBC declining 0.52 per cent to $11.45.
Overall, six out of the 12 sectors finished in the red, including manufacturing and properties.
Manufacturing firms have become more downbeat about prospects in the next six months, according to an Economic Development Board survey.
Electronics and precision engineering firms were the most gloomy. Both clusters expect weaker orders amid softening demand for semiconductors and related equipment, and growing concerns over trade tensions. Indeed, some manufacturing-linked stocks came under pressure yesterday. Hi-P International gave up 0.54 per cent to92 cents, Delong lost 0.17 per cent to $5.84 and AEM Holdings cut 1.03 per cent to 96.5 cents.
With January wrapped up and some markets heading off for Chinese New Year festivities, the question is, what's next?
Besides ongoing trade worries, Phillip Securities research head Paul Chew expects stock markets to be driven by corporate earnings. "By February, most of the results will be out, so that might give a little bit of direction," he said.
But British bank IG analyst Pan Jingyi says the trade conflict is the biggest issue: "With the countdown to the March 1 deadline the case for US-China talks, this could perhaps be the greatest driver for market sentiment as we move forth."