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Singapore shares lose 0.1% on Wednesday as investor optimism cools

THE local equities market closed lower on Wednesday after a Wall Street sell-off as investor optimism cooled. This follows the events of last week, where the US Federal Reserve revealed its dovish stance and US-China trade talks appear back on track.

The Straits Times Index (STI) continued to recede, finishing Wednesday's session at 3,301.25, 3.02 points or 0.1 per cent lower.

Regional markets sang the same tune for the most part, with Australia, China, Japan and Malaysia ending lower. Meanwhile, South Korea closed flat and Hong Kong recorded a modest gain.

Vanguard Markets managing partner Stephen Innes believes that risk sentiment in regional markets has yet to be "snuffed out". That being said, "unlike the stampede into risk assets last week, not only has the dust settled, there are signs that the market is taking on some risk insurance".

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Activity in the Singapore market was above average. Trading volume clocked in at 1.27 billion securities, 6 per cent over the daily average in the first five months of 2019. Total turnover came to S$1.17 billion, 12 per cent over the January-to-May daily average.

Across the market, decliners outpaced advancers 212 to 171. The STI had half of its 30 components ending in the red.

With the stock rebound towards the end of last week having been settled, investors have moved back to adding defensive positions. On 59.2 million shares traded, Singtel was the benchmark index's most traded stock for a second successive session. The telco added S$0.02 or 0.6 per cent at S$3.50.

Investors were buoyed by Singapore's largest telco revealing in its annual report an intention to monetise some of its loss-making digital investments, and its chief executive taking a big pay cut.

It was a mixed day for financials. DBS Group Holdings closed S$0.12 or 0.5 per cent down at S$25.48 and United Overseas Bank dipped S$0.03 or 0.1 per cent to end at S$25.67. OCBC Bank was unchanged at S$11.25.

Bourse operator Singapore Exchange posted gains, closing S$0.02 or 0.3 per cent higher at S$7.87.

Traders noted that a number of real estate investment trusts (Reits) have hit dear valuations following a rally on expectations of a dovish US Federal Reserve. That said, they continue to gain the attention of investors.

Google Asia-Pacific's decision to lease space at Alexandra Technopark from the first quarter of 2020 saw Frasers Commercial Trust units jump S$0.08 or 5.1 per cent to close at S$1.66.

Among tech stocks, Venture Corp shares continued to slide due to headwinds the global manufacturing sector is facing and over the ongoing US-China trade conflict. After closing 4.9 per cent lower on Tuesday, Venture shares extended losses to close S$0.44 or 2.7 per cent down to S$16.02.