Bulls And Bears

STI falls as focus turns to trade dramas, Fed meet

Banks, real estate investment trusts fall, while offshore and marine stocks rise

Investors here and across the region seemed more focused on trade dramas and United States interest rate policy than shares yesterday.

The sense of drift sent most markets sideways, although local stocks went into negative territory.

The Straits Times Index retreated 0.42 per cent, or 13.31 points, to 3,174.38, with gainers outpacing losers 215 to 166 on trade of 1.4 billion shares worth $1.17 billion.

DBS Bank led losses, giving up 1.16 per cent to $23.94, while United Overseas Bank retreated 0.90 per cent to $25.30 and OCBC Bank shed 0.09 per cent to $11.39.

A handful of real estate investment trusts (Reits) also headed lower, save for OUE Hospitality Trust, which tacked on 4.32 per cent to 72.5 cents. It posted higher distribution per stapled security for the fourth quarter yesterday.

CapitaMall Trust ended the day down 1.67 per cent to $2.36, Mapletree Commercial Trust fell 2.23 per cent to $1.75, and Starhill Global Reit dipped 0.69 per cent to 72 cents.

Cromwell European Reit, which shed 5 per cent on Tuesday after one of its largest investors sold its entire stake, steadied yesterday to close up 1.08 per cent at 47 euro cents.

Brighter spots were found among offshore and marine stocks, which are now taking a breather as crude prices steady. The US government slapped sanctions on Venezuela's state-owned oil firm PdVSA earlier this week, with the move largely expected to ease supply glut worries.

Singapore's three biggest shipyard stocks traded mixed. Yangzijiang Shipbuilding gained 3.65 per cent to $1.42 and Sembcorp Marine put on 0.63 per cent to $1.60, but Keppel Corp was 0.33 per cent lower at $6.07.

Investors were keeping a keen eye on high-level US-China trade talks in Washington. There is apparently willingness to reach some form of deal as US Treasury Secretary Steven Mnuchin has said he expects significant progress this week.

Yet, US accusations that Chinese telecoms giant Huawei committed theft and bank fraud set a tricky stage for the negotiations. Market observers have noted that the Chinese side has remained fairly silent.

Meanwhile, the US Federal Reserve is set to announce its monetary policy decision. Expectations are for zero Fed hikes this year.

Corporate guidance from technology firms remains one to watch, even as Apple delivered earnings in line with analysts' expectations.

Test-handling machine supplier AEM Holdings rebounded strongly yesterday, especially after Maybank Kim Eng initiated a "buy" on the stock. Shares surged 9.39 per cent to 99 cents.

A version of this article appeared in the print edition of The Straits Times on January 31, 2019, with the headline 'STI falls as focus turns to trade dramas, Fed meet'. Subscribe