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STI inches up to hit 4-week high

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Thin trading, with tough week ahead in the shadow of China-US trade dispute

THE thin trading yesterday - due partly to the Mid-Autumn Festival - hides the fact that the week ahead will be tough, with politics and trade tensions expected to keep markets on tenterhooks.

The Sino-US trade dispute went up yet another notch as both nations imposed fresh tariffs on each other.

The effect was slightly blunted as major Asian bourses like Tokyo, China and Seoul were shut for the day for the Mid-Autumn Festival.

Hong Kong financial markets will be closed today for the festival.

But yesterday, the Hang Seng was dragged down by Chinese property stocks to end 1.62 per cent lower.

Despite markets appearing to have priced in actions pertaining to the Sino-US trade dispute, investors are becoming increasingly worried that the trade war may enter "phase III", said FXTM's chief market strategist Hussein Sayed in a note.

"With Beijing cancelling planned trade talks on Saturday and the US State Department imposing sanctions on China's defence agency, relations between the two largest economies in the world may further deteriorate," he cautioned.

"Whether the pain will begin reflecting in Wall Street depends on what happens next. If President Trump follows through on his promises to impose further tariffs on the remaining US$267 billion (S$364 billion) of Chinese imports, investors may consider it as a signal to move out of US equities."

The key Straits Times Index (STI) ended flat yesterday, inching just 0.05 per cent up, or 1.48 points, to finish at 3,219.16, touching a four-week high.

Decliners outnumbered advancers 212 to 165, on turnover of some 1.05 billion shares worth a total of $801 million.

The most actively traded counter was Rex International with 74.44 million shares changing hands, rising 1.84 per cent or 0.2 cent to 11.1 cents, while among active index stocks, UOB was one of the top gainers, rising 1.43 per cent, or 38 cents, to end at $26.88.

The tech sector was less rosy at the close, buffeted by the effects of the tariffs.

AEM shed 2.72 per cent to 71.5 cents, while Hi-P closed 2.67 per cent lower to 91 cents. Venture Corp, meanwhile, fell 0.52 per cent to $17.36.

Keppel Corp ended 0.43 per cent, or three cents lower, to $7.00. It announced earlier in the day that it was considering a potential transaction in logistics and data centre arm Keppel Telecommunications & Transportation (Keppel T&T).

The conglomerate had also asked Singapore Press Holdings (SPH) to take part in a possible transaction involving their stakes in listed telco M1. SPH's shares eased 0.71 per cent to $2.80.

The announcements brought fresh hope for a potential sale transaction after an earlier July attempt, noted CMC Markets analyst Margaret Yang, despite both Keppel and SPH cautioning that there was "no certainty or assurance" of any transaction occurring.

In industrials, Yoma Strategic gained 3.92 per cent, or one cent, to 26.5 cents after announcing its intention to enter Myanmar's heavy construction equipment sector on the back of rising infrastructure projects in the country, which the Myanmar government plans to spend billions on.

Part of its plans involve subsidiary Yoma Fleet partnering Myan Shwe Pyi Tractors (MSP CAT), the authorised dealer of Caterpillar-branded heavy equipment in Myanmar.

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