Singapore shares gain 0.4% on Tuesday despite US-China trade worries

IN contrast with Wall Street, Asian equities were mostly higher despite worrying signs that this week's trade negotiations between the US and China have hit some pre-talk speed bumps.

Singapore's Straits Times Index (STI) closed at 3,110.85, adding 11.37 points or 0.4 per cent on Tuesday.

Elsewhere in the Asia-Pacific, Australia, China, Hong Kong, Japan and South Korea all posted gains. Malaysia ended flat.

Markets in China and Hong Kong, which returned from the holidays on Tuesday, were given an additional boost after September's services sector data for China grew at its slowest pace in seven months, boosting hopes that Beijing will roll out more fiscal stimulus measures.

Regional equities may have been positive but it is worth pointing out that reports on Monday suggested Beijing was not interested in a broad-based deal with Washington, preferring to narrow the scope of discussion to issues it wishes to resolve.

Shortly after, the US government expanded its trade blacklist to include more Chinese companies and government agencies on what the administration said was due to China's treatment of Muslim minorities in Xinjiang province.

"With Machiavellian timing, the US announced that 28 Chinese companies were added to its 'entity' list ... Not a great start before the heavyweights of both sides meet on Thursday," wrote Oanda Asia-Pacific senior market analyst Jeffrey Halley.

China's and Hong Kong's return to trading saw liquidity in the region pick up, with trading volume in Singapore clocking in at 941.73 million securities, 77 per cent of the daily average in the first eight months of 2019. Meanwhile, total turnover clocked in at S$970.56 million, 90 per cent of the January-to-August daily average.

Across the market, advancers outpaced decliners 188 to 169. Five of the blue-chip index's 30 counters ended in the red.

Golden Agri-Resources was the STI's most active counter with 52.3 million shares traded. The agri-business company edged up 0.5 Singapore cent or 2.4 per cent to close at 21.5 cents.

The banking trio mostly ended higher. DBS Group Holdings added eight Singapore cents or 0.3 per cent to S$24.76, United Overseas Bank gained S$0.22 or 0.9 per cent to S$25.54 while OCBC Bank finished unchanged at S$10.68.

Among the blue-chip index's laggards was Jardine-owned Hongkong Land, which ended six US cents or 1.1 per cent lower at US$5.45. The property player's shares have been trading at levels below their historical averages and represented value. But with issues in Hong Kong showing little sign of easing, a trader told The Business Times that while he previously recommended clients to look into buying attractively-valued counters with exposure to Hong Kong, he has a change of mind.

"There are too many variables with regard to the political situation in Hong Kong, and after some deep thought, I think its best to play safe and hold less Hong Kong-listed assets and currency," he said.

Other Hong Kong plays ended with gains. Jardine Matheson Holdings closed up US$0.85 or 1.6 per cent to US$54.04 while Jardine Strategic Holdings advanced US$0.34 or 1.2 per cent to US$29.70.