Singapore shares track regional declines as Trump’s tariffs rattle investors; STI down 0.8%
Trade restrictions could result in reduced global trade flows and supply-chain shifts, which could mean higher costs for businesses and higher inflation, notes market strategist
US PRESIDENT Donald Trump stirred up market turbulence in the new trading week as he followed through on his campaign promise to impose tariffs on Mexico, Canada, and China.
The move over the weekend rattled stock markets when they opened on Monday (Feb 3), with bourses from Japan to Australia swimming in a sea of red.
Singapore’s was not spared either, as the Straits Times Index (STI) closed 0.8 per cent or 29.35 points lower at 3,826.47.
Taiwan’s benchmark Taiex index bore the brunt, sliding 3.5 per cent. Japan’s Nikkei 225 declined 2.7 per cent, South Korea’s Kospi was down 2.5 per cent, and Australia’s S&P/ASX 200 fell 1.8 per cent.
Markets in mainland China remain closed for Chinese New Year. Hong Kong’s Hang Seng was relatively unscathed, slipping just 0.04 per cent.
Trade restrictions could result in reduced global trade flows and supply-chain shifts, which could mean higher costs for businesses and higher inflation, noted Yeap Jun Rong, market strategist at IG.
“The uncertainty over how long trade tensions may persist – along with the possibility that additional economies, such as the European Union, could be targeted by US tariffs – may trigger a wave of de-risking across global equities,” he said.
In Singapore, decliners outnumbered gainers 348 to 201 across the broader market, with 1.1 billion securities worth S$1.3 billion traded.
Topping the STI chart was Wilmar International , as the agribusiness bucked the downward trend to close 1.3 per cent or S$0.04 higher at S$3.16. Singtel , in contrast, fell 3.3 per cent or S$0.11 to S$3.22, putting it at the other end of the spectrum in terms of performance, even as the highest-weighted stock in the STI after the trio of banks rose 8.1 per cent in January.
Vasu Menon, managing director of investment strategy at OCBC, noted though that, overall, Trump’s pro-business, anti-regulation and pro-market stance should augur well for risk assets, especially US equities, over the medium term as he aspires to further America’s exceptionalism.
Menon is sanguine about the medium-term investment outlook, and sees opportunities in both equities and bonds, especially on any sharp pullbacks.
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