Bulls And Bears

STI slips on trade and geopolitical tensions

US-China trade spat and India-Pakistan conflict among investors' concerns

Investors have lots to ponder as February ended on a low note with shares heading south yesterday.

The concerns were coming thick and fast, from doubts over a China-United States trade deal to tensions over India and Pakistan.

News that the US-North Korea summit in Hanoi was cut short due to disagreements over the extent that Washington would lift sanctions did not help either.

A trader noted that "it clearly shows the US cannot have its way with everything".

"China will probably do the same if the US expects too much from them."

Trade and political factors aside, weak economic data in China, Japan and South Korea suggested that global growth was slowing.

It all ended in the Straits Times Index (STI) dropping 37.33 points or 1.2 per cent to 3,212.69, although shares were still up 0.7 per cent last month.

Trading clocked in at 1.38 billion shares worth $1.53 billion with losers outpacing gainers 273 to 166.

Elsewhere, markets were mixed, with Australia closing higher, but Japan, mainland China, Hong Kong, Malaysia and South Korea fell.

Thomson Medical Group was the most active here, rising 1.3 per cent to eight cents with 85.2 million shares traded. It posted a net profit of $2.2 million last year, reversing the net loss of $22.3 million in 2017.

Casino operator Genting Singapore was the most heavily traded STI, ending 1.9 per cent lower at $1.02 on trade of 62.1 million.

Yesterday's big STI gainers - the Jardine trio - took a sizeable hit yesterday as Jardine Cycle & Carriage's full-year earnings, which were released after market close, missed street estimates. The counter closed 9.0 per cent down at $33.34.

By virtue of its 75 per cent stake in Jardine C&C, Jardine Matheson also took a hit, dipping 3.8 per cent to US$68.56. Jardine Strategic closed 1.9 per cent lower at US$39.50.

The banks also trended lower. DBS lost 1.2 per cent to $24.84, OCBC retreated 1.07 per cent to $11.06 while United Overseas Bank lost 0.75 per cent to $25.02.

While sentiment was not at its best, some counters turned in a strong performance.

Ascendas Hospitality Trust closed 1.8 per cent higher at 86.5 cents, a 52-week high.

FXTM research analyst Lukman Otunuga summed up the final trading week of February as eventful and added: "Brace yourselves for a potentially volatile month ahead."

A version of this article appeared in the print edition of The Straits Times on March 01, 2019, with the headline 'STI slips on trade and geopolitical tensions'. Print Edition | Subscribe