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Singapore stocks pare hefty losses: STI resumes Tuesday afternoon at 3,171.74, down 0.7%

SINGAPORE stocks resumed trading on Tuesday afternoon still in the red but having pared its hefty losses on opening after China moved to stem the yuan's slide, tempering fears of a currency war.

The Straits Times Index, which fell 1.5 per cent on opening, was trading 0.7 per cent or 22.8 points lower at 3,171.74 at 1.01pm. 

Losers outnumbered gainers 328 to 91, after about 725.1 million securities worth S$767.2 million changed hands. 

In Asia, the MSCI Asia Pacific Index was down 0.8 per cent as of 12.32pm.

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Japan's Topix was 0.7 per cent lower after nose-diving by as much as 2.9 per cent earlier. Australia's S&P/ASX 200 fell 2 per cent, and South Korea's Kospi was down 0.6 per cent. Hong Kong stocks declined 0.7 per cent, and Shanghai's Composite index sank 2.4 per cent. 

US stock-index futures rebounded, erasing earlier declines, after China's central bank set its currency fixing stronger than expected and back above the 7 per US dollar level. 

S&P 500 Index futures contracts expiring in September rose as much as 0.7 per cent as of 12.06pm, as the yuan steadied. Dow Jones Industrial Average contracts gained 0.6 per cent, while those on the Nasdaq 100 added 0.5 per cent, data from Bloomberg show. 

The offshore yuan, which initially fell to 7.1265 per dollar, the lowest since international trading in the currency began in 2010, rose 0.5 per cent to 7.0623 in response to the latest fixing. The slightly firmer-than-expected morning benchmark rate of 6.9683 was still the weakest since May 2008.

Stephen Innes, managing partner at VM Markets said: "Who doesn't love a good old Turnaround Tuesday story in the markets, but before I get too far ahead of ourselves, we have the PBOC to thank for tweaking the fix just enough to convince the markets mainland authorities are not embarking on a wave of aggressive Yuan depreciation. "While the imminent threat of a currency war has receded, the market is still hostage to escalating trade tensions. And not to overthink matters, China's manufacturing PMI remains sub-50, and with Chinese growth all but sure to soften, investor sentiment could stay soggy over the short term."

In Singapore, shares of Genting Singapore, among the most heavily traded by volume, fell 1.1 per cent, or one Singapore cent to 87.5 cents on a cum-dividend basis, with 27.8 million shares traded. Healthcare player Health Management International (HMI) dropped 0.7 per cent or 0.5 cent to 71.5 cents, with 19 million shares traded. 

Also in the red following the mid-day break were the banking stocks - DBS lost 1.1 per cent, or 27 cents to S$25.02 on an ex-dividend basis; UOB fell 1 per cent, or 27 cents to S$25.64 on a cum-dividend basis; and OCBC retreated 0.3 per cent, or three cents to S$11.05 on a cum-dividend basis. 

Other active stocks included HongkongLand which dropped 2.4 per cent, or 14 US cents to US$5.60 on a cum-dividend basis, and Mapletree Logistics Trust which lost almost 2 per cent, or three cents to S$1.50.