Singapore stocks: STI resumes Thursday afternoon at 3,202.97, down 0.2% on day

SINGAPORE shares resumed trading in negative territory on Thursday afternoon as sentiment remained cautious across most Asian markets, with the Straits Times Index losing 4.77 points, or 0.15 per cent to 3,202.97 as at 1.02pm.

The slip also comes after a pullback in US stocks for a second straight session overnight, with petroleum-linked shares dragging the main indices lower.

On the Singapore bourse, gainers outnumbered losers 146 to 137, after about 674.1 million securities worth S$458.7 million exchanged hands.

Among the most heavily traded by volume, YZJ Shipbuilding gained 1.4 per cent, or two Singapore cents to S$1.47, with 23.3 million shares traded, and Singtel rose 0.3 per cent, or one Singapore cent to S$3.33 on a cum dividend basis, with some 12.8 million shares traded.

Banking stocks traded mixed with OCBC losing 0.9 per cent, or 10 Singapore cents to S$10.70, and DBS edged down 0.1 per cent, or two cents to S$24.68, while UOB gained 0.1 per cent, or two cents to S$24.63.

Other active index stocks included Genting Singapore which fell 1.1 per cent, or one Singapore cent to S$0.875, whereas City Developments advanced 2.8 per cent, or 26 cents to S$9.45.

Elsewhere, Asian equities slumped on Thursday as the Hong Kong market continued to be hit following street protests, with the Hang Seng Index down 0.7 per cent by the afternoon trade. Japan's Topix also shed 0.8 per cent, while South Korea's Kospi lost 0.3 per cent.

On the commodities front, oil prices flirted with five-month lows, on the back of higher US crude inventories and a bleak demand outlook.

In a research note on Thursday, DBS analyst Yeo Kee Yan noted that oil prices have turned down since late April on concerns about falling demand from the US-China trade war and supply glut.

"Brent fell a further 4 per cent yesterday to test the US$60 per barrel mark after data showed that US crude supplies had risen to a level not seen since July 2017. While there is the possibility of Brent falling below US$60 per barrel, the correction has already run deep since the April peak of US$75 per barrel. We see Brent holding up around US$58.80 per barrel, or if there is any undershoot, the price should not drop below US$55.30 per barrel."

Mr Yeo expects a subsequent recovery towards the US$65 level, and noted that potential drivers include Opec and its allies reaching an agreement to extend output cuts. In anticipation of a possible upcoming low and a subsequent rebound for Brent, stocks to watch within the sector include SembCorp Marine, SembCorp Industries and Keppel Corp, the DBS analyst said.

On the flip side, the Hong Kong tumult remains an unexpected boon for gold markets which is back in "gold rush mode", noted Stephen Innes, a managing partner at Vanguard Markets (Singapore).

Gold prices advanced on Thursday, as demand for the safe-haven metal rose on expectations of an interest rate cut by the US Federal Reserve. Spot gold edged up 0.3 per cent at US$1,336.48 per ounce, while US gold futures were 0.2 per cent higher at US$1,339.80 an ounce by the afternoon trade.

Edward Moya, senior market analyst at Oanda noted: "Gold prices rose as uncertainty persists with how Chinese political uncertainty and trade deals will unravel in the coming month. The yellow metal also got a boost from cooler inflation data that also increased Fed rate cut bets, which could coincide with a pullback with the US dollar.

"The softer than expected inflation data should be supportive gold in the short-term, as a July Fed rate cut appears to be firmly priced in," added Mr Moya.