STI falls 0.5% on poor market sentiment

The gloomy sentiment over global trade appears to have dug in its heels, as markets brace themselves for a protracted tariff spat between Washington and the rest of the world.

The Straits Times Index (STI) ended yesterday neatly on the 3,300 mark on a decline of 15.9 points, or 0.48 per cent, with losers beating gainers 250 to 147 on the full bourse.

Oriano Lizza, a Singapore-based CMC Markets sales trader, said the previous day's mild recoveries "are purely damage limitations as trade talks linger over the region", while Mr Paul Gruenwald, S&P Global Ratings' chief economist, warned: "Trade risks remain front and centre as the US launched a new round of tariffs against China, as well as Europe and Canada."

Singapore stocks have been "victims of (an) escalating US-China trade war", wrote DBS analyst Yeo Kee Yan, citing "the country's status as a small, open economy much dependent on global trade flows". He said the odds of the index testing the 3,200 barrier are low, and floated a possible short-term recovery in July with resistance at 3,355 and 3,417.

But Mr Yeo noted that the STI has dropped "decisively below the crucial 200-day exponential moving average" of 3,420 for the first time since December 2016.

He said the fall below that mark "indicates (that) the long-term trend has turned negative, unless (the) STI recovers back above it".

Electronics provider Venture Corporation weighed down the index with its prolonged decline. It lost $0.12, or 0.66 per cent, to $18.09 - its lowest since last October.

No less embattled, but taking a turn for the better, Noble Group continued its share price rally after winning shareholder Goldilocks Investment Company's approval of a contentious restructuring plan.

Noble put on 1.6 cents, or 18.18 per cent, to 10.4 cents, with 63.4 million shares traded.

Plantation companies fared poorly, no thanks to recent softness in crude palm oil prices, despite analyst expectations of an imminent rebound in exports.

"In view of the unexciting near-term price and earnings prospects, we retain our 'neutral' rating on the sector," said CGS-CIMB analyst Ivy Ng in a sector update on Wednesday.

Wilmar International shed $0.05, or 1.6 per cent, to $3.07, on a volume of 14.8 million shares, while Golden Agri-Resources lost $0.015, or 4.55 per cent, to $0.315, with 16.7 million shares changing hands. Bumitama Agri was down by half a cent, or 0.77 per cent, to $0.645.

Singapore-listed telcos also took a hit, after fibre broadband company MyRepublic - which is planning an initial public offering in Hong Kong - finally launched mobile services here.

StarHub, which leases network to MyRepublic, slid by $0.08, or 4.73 per cent, to $1.61, on 11.7 million shares, and Singtel dipped by $0.01, or 0.32 per cent, to $3.16. But M1, host to mobile virtual network operator Circles.Life, rose by $0.01, or 0.65 per cent, to $1.56.

Still, Maybank Kim Eng chief executive John Chong told media that Asian markets should prove resilient.

"While there have been substantial capital outflows as a result of the stronger US dollar, higher interest rates and US-China trade friction, Asia is now better positioned to weather the volatility," he said in a statement.

"We believe investors will see real value emerging in Asian corporates after the recent market tantrums, and should capitalise on the opportunity."

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