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Singapore shares fall 0.6% after negative US-China trade deal headlines

PROGRESS, or a lack thereof, on a possible US-China trade front continues to be the "be-all-and-end-all" driver of market sentiment. On Tuesday, investors had to digest reports that Beijing was concerned by US President Donald Trump's unwillingness to roll back tariffs.

The effect of the reports seemed to have a bigger negative effect here. The Straits Times Index (STI) reversed Monday's gains, skidding 19.79 points or 0.6 per cent to close at 3,238.87. The Japanese and South Korean benchmarks joined the city-state's in the loss column.

Elsewhere in the Asia-Pacific, markets in Australia, China, Hong Kong, Malaysia and Taiwan seemed less fazed, notching up gains instead.

Despite protests showing no signs of letting up before the territory's district elections on Sunday, the Hong Kong benchmark posted a second straight session of gains. Traders attributed the gains not to "bottomfishing" but hopes of further stimulus in the mainland to combat the effects of the economic slowdown.

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"Asian stocks are mixed, unable to stay in lockstep with their US counterparts which marched on to post fresh record highs," said FXTM market analyst Han Tan.

He added that sentiment remains weighed down by concerns over the prospects of a US-China trade deal, with markets' patience "wearing thin over the fate of the 'phase one' agreement".

In Singapore, trading volume stood at 1.49 billion securities, 29 per cent over the daily average in the first 10 months of 2019. Meanwhile, total turnover clocked in at S$1.09 billion, just over the January-to-October daily average.

Across the market, decliners beat advancers 217 to 183. The blue-chip index had a third of its 30 counters in the red.

With 52.4 million shares changing hands, Golden Agri-Resources was the STI's most active counter. It fell 1.5 Singapore cents or 5.9 per cent to 24 cents.

Based on Singapore Exchange data, institutional investors were net buyers of the agribusiness player in the past week while retail investors were net sellers. The latter were more likely to have booked profits after the counter's 29 per cent run-up on higher crude palm oil prices from the start of the month to before results were announced last Thursday.

Meanwhile, Yangzijiang Shipbuilding continued to see heavy activity on Tuesday. Following Monday's 8 per cent jump, shares in China's largest non-state-owned shipbuilder dipped two Singapore cents or 1.9 per cent to S$1.06.

The local banks ended lower. DBS Group Holdings eased S$0.16 or 0.6 per cent to S$26.44, OCBC Bank was S$0.07 or 0.6 per cent down at S$11.12 while United Overseas Bank closed at S$26.67, shedding S$0.26 or 1 per cent.

Among the benchmark's gainers was ComfortDelGro, which added three Singapore cents or 1.3 per cent to S$2.36. Last week, the transport operator posted weak Q3 results, with net profit falling 10.8 per cent to S$70 million, weighed down by its taxi business and forex exposure to the Australian dollar and British Pound.

That said, KGI Securities upgraded its call on the company to "outperform" but lowered the price target to S$2.61 on Tuesday, with downside risks from a depreciating Aussie dollar and uncertainty of the upcoming UK general election already priced in.

"We now believe it's time to grab a piece of this steady cash flow business," said Joel Ng, KGI Securities' head of Singapore research.