Singapore shares close down 0.4% on Wednesday

ASIAN markets pulled back on the eve of the US-China trade pact signing, adopting a more cautious tone on news that the deal would not reduce existing tariffs on Chinese goods.

Aside from Australia, where the S&P/ASX 200 index rose 0.5 per cent on gains in gold stocks, most regional markets ended lower on Wednesday.

Shares in Japan and South Korea snapped winning streaks as investors seized the opportunity to lock in profits gained over the last three to four sessions. China and Hong Kong also saw losses of 0.2 to 0.5 per cent.

Singapore's Straits Times Index lost 13.56 points or 0.4 per cent to 3,256.98. Turnover was 1.31 billion securities worth S$1.11 billion, and losers outnumbered gainers 229 to 183.

SGX market strategist Geoff Howie noted that the five most actively traded Singapore-based manufacturers all ended without gains on Wednesday. Yangzijiang Shipbuilding, Wilmar International, ST Engineering, Venture Corp and AEM Holdings averaged a decline of 0.9 per cent on Wednesday and trimmed their average gains for the year so far to 4 per cent.

AEM managed to close without losses, with investors perhaps encouraged by a KGI Securities report in which analyst Kenny Tan raised his target price on the counter to S$2.57 from S$1.80.

He noted that AEM remains undervalued against its peers and has room for further upside, even after its share price more than doubled in 2019. In addition, AEM stands to gain from its key customer's pivot into solutions that would drive demand for AEM's high density test handlers, and its recent acquisition of Mu-TEST will help it enter a new niche segment of the semiconductor market.

Golden Agri-Resources led active trading with 130 million shares changing hands. It lost half a Singapore cent or 2.08 per cent to S$0.235.

Plastic components maker Fu Yu saw heavy trading of about 27.1 million and gained three Singapore cents or 12 per cent to S$0.28. This came after DBS Group Research initiated coverage of the counter with a "buy" call, citing a turnaround in the manufacturing sector, the company's strong financial positioning and improving margins.

Singtel shares broke a losing streak that saw its price fall 4.13 per cent over four sessions. It closed up 0.3 per cent to S$3.26, after a UOB Kay Hian report noted that Singapore's telco market appears to be stabilising, and Singtel's associated company Bharti Airtel may narrow its losses in H2 2020 with the help of potential mobile tariff hikes in India.

Thursday's trading may reflect doubt over whether US President Donald Trump's "beautiful monster" of a trade pact can lead to further progress in negotiations to lower trade barriers, said Vishnu Varathan, Mizuho Bank head of economics and strategy for Asia and Oceania.

"The 'beautiful' deal being signed tonight may appear less beautiful the 'morning after', possibly tempting 'selling the (beautiful) fact' trades," he wrote in a Wednesday note.