Singapore shares closed sharply lower as sentiments across the region were hit by worries of a deepening US-China rift, and as Beijing gets set to enact a controversial national security law on Hong Kong.
The Straits Times Index fell 55.51 points, or 2.17 per cent, to 2,499.83. Week on week, the index has fallen nearly 24 points or 0.9 per cent.
Key gauges across the region were awash in red, with Hong Kong leading the losses as investors braced themselves for retaliation from Washington.
Hong Kong dived 5.56 per cent. South Korea ended 1.41 per cent lower and Japan lost 0.8 per cent.
China’s benchmark Shanghai Composite Index fell 1.89 per cent, while the Shenzhen Composite Index lost 2.02 per cent.
The risk of a return of mass protests on the streets of Hong Kong added to market jitters.
“Overhanging these are concerns that China and the United States are about to engage in a new round of trade wars. In all honesty, the timing could not be worse,” said Oanda senior market analyst Jeffrey Halley.
Rising political tensions between China and the US, China and Australia, and China and Hong Kong have started to push global equities lower ahead of the long weekend in the US and Britain, remarked Mr Stephen Innes of AxiCorp.
Some 1.78 billion shares worth $1.63 billion were traded, and losers trounced gainers 347 to 112.
OCBC Bank (which traded ex-dividend), DBS and United Overseas Bank lost between 22 cents and 40 cents, shaving 23 index points off the STI. Oceanus Group hogged the day’s most active list, with 66 million shares traded. It closed unchanged at 0.5 cent.
UOL Group dipped 2.8 per cent to $6.49. OCBC Investment Research issued a “buy” rating on the stock, given its low valuation and strong balance sheet.
Yangzijiang Shipbuilding Holdings fell 3.2 per cent to 92 cents. Citi Research said a recovery may be under way for the shipbuilder, with workers returning to its shipyards in China. The house has a “buy” rating on the counter, with a target price of $1.35.
Still, MSCI’s world stock index is up around 2.5 per cent this week as central bank stimulus in the face of the coronavirus shock underpins investor sentiment.
“Overall it’s fascinating to see that markets are shaking off the very bad news on the future US-China relationship much more now in the face of a global pandemic than it did last year when the tensions were fraught,” Deutsche Bank strategist Jim Reid told Reuters.