Singapore shares add 0.5% as trade war jitters ease for now

AFTER two days of bloodletting, Singapore stocks rebounded on Wednesday as the US stepped up to quell worries over a protracted trade war. 

The local benchmark opened up 0.11 per cent in the morning and climbed during the session to finish at 3,184.69, up 0.45 per cent or 14.22 points. Trade activity picked up in the later half of the session, with 994.44 million shares worth S$1.14 billion changing hands. 

Gainers edged out losers 222 to 203, led by benchmark heavyweights like Jardine Strategic Holdings and DBS Group which had recovered from the previous day's bruising. 

Jardine Strategic closed 1.39 per cent or US$0.46 higher at US$33.48, while DBS rose 0.8 per cent or S$0.20 to S$25.08. 

Among the most actively traded was Yangzijiang Shipbuilding, whose counter slumped 5.11 per cent or S$0.07 to S$1.30 on a volume of 51.6 million shares. On Monday, the company posted a net profit of 936 million yuan (S$186 million) for the second quarter, down 6 per cent from the same period a year earlier.

But while markets are in temporary relief, investors would do well to remain wary, said analysts. 

"The bearish bias remains the case amid the potential for further fallouts," wrote IG strategist Pan Jingyi in a note. 

Credit Suisse's research analysts are also watching out for slowing economic growth, and have turned even more cautious. "While we were previously cautious, we had expected attractive valuation and dividend yield to provide support to the market," the analysts wrote in a Wednesday note.

"However, we now expect slowing economic growth to drive deeper earnings cuts, with potential downside risk to dividends as a result."