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Singapore shares close 1% lower

SINGAPORE shares closed lower on Tuesday, snapping a five-day winning streak with the key Straits Times Index losing 28.19 points or 1.05 per cent to finish at 2,661.42.

Most other regional bourses also took a breather from the recent strong rally, although there was no stopping China; the Shanghai Composite extended gains by another 0.4 per cent on Tuesday.

Trading sentiments have improved lately, as more countries re-open their economies and ease lockdown restrictions. Caution prevailed however, as lockdown returned in Melbourne, Australia.

While activity remains weak, investors have been focusing on the tentative signs of encouraging data, and seem hopeful for a more significant pick up in the third quarter of this year. Schroders wrote in a report: “However, beyond this point, uncertainty abounds. Our view is that the virus is contained, but epidemiologists stress the risks of a second wave of infection. At the same time, markets remain volatile and sensitive to geopolitical headlines and resurgent US-China tensions."

IG Markets’ Jingyi Pan expects some caution towards the later part of the week, with the big banks' earnings call due  the following week. “Q1 earnings had captured only a small part of the Covid-19 hit to the US economy, with the dent mostly absorbed into Q2 thus far. Despite substantial provisions made, a true picture would arrive only with the earnings results. One to watch,” she said.

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In Singapore, turnover was 2.3 billion shares worth S$1.24 billion, from Monday’s 1.86 billion shares worth S$1.17 billion. Of the STI constituents, 23 counters posted losses and five chalked up gains.

The losses in the local bourse were led by the three big banks and property stalwart CapitaLand, which lopped off over 17 index points from the STI.

On the news front, Spackman Entertainment Group was the third most active counter, with 143 million shares worth S$1.5 million done. The counter finished the day 0.1 Singapore cent or 10 per cent up at 1.1 Singapore cent. Spackman said it has inked a non-binding letter of intent (LOI) with a potential buyer’s representative for its major asset Zip Cinema - a South Korean production house.

Top Glove Corp added 10 Singapore cents or 1.5 per cent to S$6.60. In a report released on Tuesday, AmBank Research maintained an “overweight” rating on Malaysia’s glove sector and said it expects sales volume and average selling price of gloves to “grow exponentially” in the second half of this year amid the Covid-19 pandemic.

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