Singapore shares open lower on Wednesday; STI down 0.2% to 3,365.61

SINGAPORE stocks slipped into a midweek languor on Wednesday, with the Straits Times Index dipping 5.19 points, or 0.2 per cent to 3,365.61 as at 9.03am.

This came despite US stocks ending a choppy session higher overnight, with the S&P 500 at a second straight record high. The S&P 500 turned positive in the afternoon trade and eventually closed up 0.3 per cent, while the Nasdaq Composite added 0.2 per cent, and the Dow finished 0.2 per cent higher. Over in New York however, petroleum-linked shares tumbled with oil prices on Tuesday.

On the Singapore bourse, gainers outnumbered losers 77 to 46, after about 58.3 million shares worth S$82.8 million changed hands.

Among the most heavily traded by volume, Genting Singapore lost 1.1 per cent, or one Singapore cent to S$0.925, with 10.3 million shares traded, while ESR-Reit gained 1.9 per cent, or one cent to S$0.535, with 8.1 million shares traded.

Other active stocks included CapitaLand Commercial Trust which rose 1.4 per cent, or three Singapore cents to S$2.20, and Sembcorp Marine (SembMarine) which tumbled 5.2 per cent, or eight cents to S$1.46.

In a bourse filing on Wednesday before the market opened, SembMarine noted that it has cooperated fully with the Brazilian Federal Police after a search warrant was executed on its subsidiary in Brazil. The search warrant was in connection with ongoing investigations related to Operation Car Wash in Brazil, the country's biggest anti-graft crackdown which sent former president Luiz Inacio Lula da Silva to jail.

"With global risk appetite starting to waver yesterday, Asian markets may also open on a softer note this morning and tread lower today," OCBC said in a research note on Wednesday morning.

The bank added that market attention is likely to turn to today's economic calendar comprising of China's Caixin and eurozone's service and composite PMIs (purchasing managers' index), US's ADP employment change, mortgage applications, durable goods, initial jobless claims and factory orders, as well as Singapore's COE tender results.

Elsewhere, futures on the S&P 500 Index fell 0.2 per cent as at 9.40am.

Asian equities also came in mostly lower in early morning trade, as initial enthusiasm over the latest US-China trade truce was overtaken by fresh concerns over Washington's threat of additional tariffs on European goods.

Japan's Topix slipped 0.9 per cent, Hong Kong's Hang Seng declined 0.4 per cent, and South Korea's Kospi fell 0.8 per cent. Meanwhile, Australia stocks bucked the trend to rise 0.3 per cent.

Among the commodities, oil rebounded slightly after suffering its worst reaction to an Opec meeting in more than four years. Overnight, oil prices fell to their lowest level in two weeks, as worries over softening demand came to the forefront after Opec finalised an extension of its production cuts.

West Texas Intermediate crude for August delivery rose 34 US cents to US$56.59 a barrel as at 9.30am on Wednesday, data from Bloomberg shows.

Separately, gold prices climbed over 1 per cent to hit a one-week high on Wednesday, propped up by a subdued US dollar, as renewed concerns over global trade encouraged safe-haven demand and drove down US yields.

Spot gold added 1.1 per cent to US$1,433.50 per ounce, and US gold futures were up 2.1 per cent to US$1,437.7 an ounce.

In a treasury research note on Wednesday, OCBC noted that gold prices have rallied above US$1,400 per ounce in June.

"Given the soft macroeconomic environment, we expect the rally to continue deep into Q3, fuelled by the Fed potentially cutting rates," OCBC economists said.

"With falling yields, a soft dollar, weakening macroeconomic conditions and trade/geopolitical tensions, gold's haven appeal has shone through. We believe gold may potentially reach an eventual resistance of US$1,500 per ounce, especially if US-Iran relations heads further south."