Rekin­dled US-China ten­sions hit mar­kets

The New Paper - - BUSINESS - NAVIN SRE­GAN­TAN

Key Asian in­dices con­tinue to trend down­wards, with Hang Seng bear­ing the brunt; STI slides 40.4 points to end at 3,115.52

Asian mar­kets were dealt an­other blow yes­ter­day as op­ti­mism from the US-China trade truce was all but ex­tin­guished with the ar­rest of Huawei Tech­nolo­gies’ chief fi­nan­cial of­fi­cer in Canada over po­ten­tial vi­o­la­tions of US sanc­tions on Iran.

CMC Mar­kets’ Mar­garet Yang told BT: “Asian mar­kets were badly punched by fears of re-es­ca­lated US-China trade spat fol­low­ing the ar­rest­ing of Huawei’s CFO.

“Mar­ket sen­ti­ment turned sour on po­ten­tial re­tal­i­a­tion mea­sures by China as this in­ci­dent se­verely un­der­mined their trade re­la­tion­ship and put the trade truce un­der threat.”

Need­less to say, the ar­rest pro­voked out­rage from Bei­jing and might com­pli­cate the al­ready

GAIN­ERS

testy trade re­la­tion­ship be­tween the two big­gest economies just as they were show­ing signs of im­prov­ing.

This weighed heav­ily on key Asian in­dices, which con­tin­ued to trend down­wards with the Nikkei, Hang Seng, Shang­hai Com­pos­ite In­dex, ASX 200, Kospi and Kuala Lumpur Com­pos­ite end­ing lower on the day.

Of the lot, Hong Kong stocks again bore the brunt of the dip­ping sen­ti­ment, with the bench­mark in­dex fall­ing by as much as 3 per cent be­fore clos­ing 663.30 points or 2.5 per cent lower at 26,156.38.

In par­tic­u­lar, tech stocks – es­pe­cially those of Huawei’s sup­pli­ers – were badly hit. But, this is mostly con­cen­trated in the Chi­nese main­land, Hong Kong and US mar­kets, where the ma­jor­ity of Huawei’s sup­pli­ers are listed, said Ms Yang.

Tokyo shares were also weighed down by a weaker US dol­lar against the yen.

In Sin­ga­pore, the Straits Times In­dex (STI) closed 40.4 points or 1.3 per cent lower at 3,115.52. Of the 30 STI con­stituents, all but eight coun­ters ended the day in the red.

Turnover on the bourse stood at roughly 1.28 bil­lion shares worth $860 mil­lion, which worked out to an av­er­age unit price of $0.67 per share. De­clin­ers greatly out­num­bered ad­vancers 245 to 151.

Lift­boat-fo­cused Ezion Hold­ings was the most ac­tively traded stock, slid­ing $0.005 to $0.056 with 78.4 mil­lion shares chang­ing hands.

Gent­ing Sin­ga­pore was the most ac­tive in­dex stock.

It closed $0.01 or 1 per cent

LOSERS

lower at $1 with a turnover of 27.6 mil­lion shares.

Bank­ing stal­wart UOB was the in­dex’s big­gest loser in per­cent­age terms, drop­ping $0.72 or 2.8 per cent to close at $25.02.

The STI’s big­gest loser in dol­lar terms – Jar­dine Math­e­son Hold­ings – ended US$1.56 or 2.3 per cent down at US$65.34.

Hongkong Land Hold­ings was the STI’s big­gest gainer, adding US$0.04 or 0.6 per cent to end at US$6.54.

Among other fi­nan­cials, DBS closed $0.51 or 2.1 per cent lower at $24.14 and OCBC dropped $0.18 or 1.6 per cent to close at S$11.31.

While most coun­ters on the in­dex ended lower, shares in prop­erty player Cap­i­taLand were among the bright spots, clos­ing $0.03 or 0.9 per cent up at $3.23.

Cap­i­taLand real es­tate in­vest­ment trusts also fared bet­ter. Units in Cap­i­taLand Mall Trust closed $0.01 or 0.4 per cent up at $2.26 and units in Cap­i­taLand Com­mer­cial Trust added S$0.01 or 0.6 per cent to close at $1.78.

On key events in the com­ing days, Ms Yang said: “Mar­kets are also likely to stay cau­tious ahead of next Tues­day’s House of Com­mons Brexit vote to de­cide UK’s fu­ture after leav­ing the Euro­pean Union.

“Po­lit­i­cal and trade un­cer­tain­ties are likely to sup­press risk ap­petite for the next cou­ple of days.”

navin­[email protected]

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