Singapore shares fall 0.6% on triple factors - coronavirus, US election and earnings

THE Singapore bourse began the week on a dour note, led by a trifecta of factors - coronavirus, US election and corporate earnings season.

The key Straits Times Index (STI) fell 14.08 points or 0.6 per cent to 2,523.31 on Monday as Covid-19 cases hit records in the US and several European countries. This week marks the final stretch before the high-stakes US presidential election on Nov 3, while focus will also be on the earnings season with tech giants in the US set to release their report card.

Across the region, key gauges in Japan, Taiwan, South Korea, Australia and Malaysia closed in the red while China bucked the trend as investors kept tabs on the Chinese Communist Party's Central Committee meeting that started on Monday. Hong Kong was closed for holidays.

"US political drama will continue to be the major market moving factor for the upcoming week and probably beyond. So far, betting odds continue to show Biden in the lead with a 66 per cent chance of winning the election, according to RealClearPolitics. However, chances of a blue wave have dropped to 50 per cent, suggesting a more volatile market reaction to the result on Nov 3," said FXTM chief market strategist Hussein Sayed.

Monday's muted trading also comes ahead of Brexit's looming deadline on Oct 31. Several key monetary policy meetings are in the offing in the euro zone, Canada and Japan. Analysts expect the European Central Bank to pave the way for more stimulus as challenges mount with rising Covid-19 cases, a Brexit trade deal and the rising risk of a double dip recession.

Many countries will report their third-quarter gross domestic product estimates. CIMB Private Banking economist Song Seng Wun expects the US, the euro zone, Germany, France, Italy, Spain, Hong Kong, Taiwan and South Korea to report sharp rebounds for the period following the collapse in the second quarter.

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On the home front, overall trading volume in the Singapore market stood at 1.27 billion shares worth S$885.60 million. Among the STI constituents, 10 counters were up and 18, down. The losses were led by the three banking stocks DBS, UOB and OCBC which collectively shaved 10.26 index points off the STI.

Keppel Corp fell three Singapore cents or 0.7 per cent to S$4.48. The conglomerate is set to release its third-quarter business and operational updates on Thursday.

SIA bucked the general trend in the market and rose four Singapore cents or 1.12 per cent to S$3.62. Last week, the national carrier said it will start three weekly non-stop flights to New York in November, amid "early signs of optimism about a recovery in air travel".