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Growth fears, trade worries send Singapore shares down 0.7% on Tuesday

SINGAPORE stocks closed broadly lower on Tuesday, as the final reading on gross domestic product (GDP) missed expectations, and growth outlook was lowered. The latest flare-up in the China-US trade war also weighed on investors' minds.

The Straits Times Index (STI) closed at 3,183.26, down 22.20 points or 0.7 per cent.

IG market strategist Pan Jingyi noted: "The Singapore market had to contend with the double whammy of the year-on-year GDP miss and lowered growth outlook, which kept prices in the red. 

"The first-quarter reading of GDP at 1.2 per cent, the lowest reading seen since 2009, had been a drag on local market sentiment."

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"Given that Huawei's access to US chips is essential to its viability as a firm, this represents further escalation and the opening up of a new dimension of the US-China trade conflict," Eli Lee, Bank of Singapore's head of investment strategy, said in a client note.

"Not only has trust between the two sides been severely eroded, a genuine threat to Huawei's survival would risk a sharp retaliation from China."

Among regional markets, China advanced 1.2 per cent but South Korea fell 0.6 per cent. Elsewhere, Australia fell 0.4 per cent while Hong Kong closed 0.5 per cent lower.

In Singapore, trading volume clocked in at 1.21 billion securities or 96 per cent of the daily average in the first four months of 2019. Total turnover came to S$1.21 billion, 18 per cent over the January-to-April daily average.

Across the market, decliners outnumbered advancers 281 to 121. The benchmark index had 21 of its 30 components trading in the red.

Among them, Yangzijiang Shipbuilding was the bourse's most traded stock, closing three Singapore cents or 2.1 per cent lower at S$1.44 with 32 million shares changing hands.

"The shipbuilder fell as its stock went ex-dividend on Tuesday," a trader noted.

Even though the US has limited the blow dealt to Huawei, albeit temporarily, by delaying the supply ban by 90 days for the Chinese firm's suppliers, tech counters in the local market saw sell-offs as investor sentiment continued to dip.

AEM Holdings, one of the firms selected by Huawei for testing and developing cabling links for the latter's 5G backhaul network and a supplier to US semiconductor Intel, closed 3.5 cents or 3.6 per cent down at S$0.93.

Elsewhere, Hi-P International ended 3.1 per cent down at S$1.24, Venture Corp closed S$0.23 or 1.5 per cent lower at S$15.37 and Valuetronics shed 1.5 cents or 2.4 per cent to S$0.605. 

The local banks also ended in the red. DBS Group Holdings finished S$0.15 or 0.6 per cent lower at S$25.74, OCBC Bank dropped six cents or 0.5 per cent at S$11.09, while United Overseas Bank fell S$0.15 or 0.6 per cent to S$24.83.