Singapore stocks dip 0.1% as growth worries linger

THE Singapore stock market rose on Wednesday morning, tracking Wall Street gains amid renewed US-China trade talks. But declines later in the day suggested other worries may be weighing on investors' minds instead.

The Straits Times Index fell 0.14 per cent or 4.69 points to close at 3,368.44.

Losers outpaced gainers, with 223 stocks that slid versus 194 on higher ground. A total of 1.45 billion shares worth S$1.04 billion changed hands.

Han Tan, market analyst at FXTM, said: "While the resumption of trade talks appears to mitigate any near-term deterioration in US-China tensions, the prudent investor will not get carried away, seeing as a meaningful deal still seems a long way off at this point in time.

"Global growth has already been stifled by the protracted impasse between the world's two largest economies, along with the imposed tariffs, and investors need not look further than the International Monetary Fund's (IMF) repeated downgrades to its global growth forecasts."

The IMF further downgraded its global growth outlook overnight to 3.2 per cent this year and 3.5 per cent next year, both down by 0.1 percentage point from its April projections. It also said that policy "missteps" on trade and Brexit could derail the expected rebound in 2020.

"The balance of economic risks remains tipped towards growth as reflected by another downgrade by the IMF of its global growth outlook," said ING economists Nicholas Mapa and Prakash Sakpal.

They also noted that traders remain anxious ahead of the European Central Bank meeting and next week's Fed meeting.

Nico Steel was heavily traded on Wednesday with over 100 million shares changing hands, lifting the stock to the top of the volumes table. Its counter closed at S$0.005, up 25 per cent or 0.1 Singapore cent.

Another active stock was Singtel, which saw 52.3 million shares traded, after its management defended the telco's investments in units such as cybersecurity arm Trustwave and digital marketing units Amobee and Videology at an annual general meeting.

The counter, trading cum dividend, was also one of the bourse's largest decliners. It closed at S$3.46, down 1.71 per cent or six Singapore cents.