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Singapore stocks: STI resumes Thursday afternoon at 3,138.46, down 0.8% on day

SINGAPORE stocks resumed trading in the negative territory on Thursday afternoon, following a weak lead from Wall Street overnight, and as Beijing ratcheted its rhetoric against Washington, amid a bitter trade war that is showing no signs of ending anytime soon.

The benchmark Straits Times Index (STI) slipped 24.82 points, or 0.8 per cent to 3,138.46 on the day as at 1pm.

Losers outnumbered gainers 190 to 106, after about 725.5 million securities worth S$506.3 million exchanged hands.

Among the most heavily traded by volume, Singtel fell 0.3 per cent, or one Singapore cent to S$3.17, with 22.1 million shares traded; while TEE International was up 3.2 per cent, or 0.2 Singapore cent to 6.4 cents, with 9.1 million shares traded.

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This came despite TEE International saying that it will delay the sale of its TEE Land stake by two months on Thursday.

Meanwhile, the financials were nursing declines after the midday break - OCBC led the way with a 1.4 per cent or 15 Singapore cents fall to S$10.74, DBS lost 1 per cent, or 25 cents to S$24.60, and UOB was down 1 per cent, or 24 cents to S$23.87.

Other active stocks included CapitaLand, which retreated 1.5 per cent, or five Singapore cents to S$3.24, and City Developments which fell 1.3 per cent, or 11 cents to S$8.24.

Dairy Farm International also edged down 1.2 per cent, or nine US cents to US$7.74. RHB Research on Thursday downgraded its rating on Dairy Farm to "neutral" with a target price of US$8.25, indicating that the stock is now trading close to its fair value estimate.

In a research note on Thursday, OCBC highlighted that with global risk appetite continuing to ebb, US stocks retreated further to a 12-week low overnight, and 10-year US Treasury bond yield tumbled 2.2 per cent - the lowest since September 2017 - amid increased speculation of Federal Reserve rate cuts.

The bank added that Asian markets may be range-bound as it awaits further cues such as the manufacturing PMIs (Purchasing Managers Index), including China's that will be released on Friday. It also noted that the STI may continue to tread within the 3,140-3,180 range for now, but that "overall risk sentiments remain soft".

"Today’s economic calendar is relatively light and comprises US's Q1 2019 GDP (gross domestic product) growth, initial jobless claims, wholesale inventories, and pending home sales," OCBC said.

Elsewhere, Asian equities were also on the back foot on Thursday, as concerns over an escalating trade war between the two world-largest economies loomed over global markets.

Most major indices in Asia fell, with the Topix in Japan down 0.5 per cent as at 1.45pm in Tokyo, and Australia’s S&P/ASX 200 Index falling 0.8 per cent.

China’s Shanghai Composite also lost 0.8 per cent, and Hong Kong’s Hang Seng slipped 0.4 per cent. The only bright spot was South Korea’s Kospi which bucked the trend to rise 0.4 per cent.

Separately, analysts from Phillip Futures also noted that global indices futures generally remained suppressed amid concerns about global growth.

"We have little expectation of a quick improvement in neither the global growth outlook nor the Sino-US trade tensions," they said.

The analysts added that the possibility of China cutting exports of rare-earth minerals to the US increased, after Chinese President Xi Jinping’s visit to a rare earth facility, and a slew of Chinese media reports advocated the threat of using rare earths as retaliation against the US.

Further provoking the trade dispute were comments from a Chinese diplomat accusing the US of "naked economic terrorism".

"We are against the trade war, but we are not afraid of it," Chinese Vice-Foreign Minister Zhang Hanhui said at a press briefing in Beijing, ahead of Mr Xi's trip to Russia next week.