STI falls 0.66% amid grim economic data

SINGAPORE shares ended a three-session rally on Wednesday, as optimism from progress on Covid-19 vaccines was marred by disappointing industrial production figures.

The Straits Times Index fell 0.66 per cent or 16.95 points to close at 2,542.08. Advancers outpaced decliners 204 to 201, after some 2.53 billion securities worth S$1.16 billion changed hands.

Singapore's July industrial production was down by 8.4 per cent year on year (yoy). The pace of decline increased from the 6.5 per cent fall in June, heightening worries about economic weakness.

Said Barclays Bank economist Brian Tan in a note: "While we expect a sequential recovery in H2 after the government's "circuit breaker" measures were eased from June, our full-year forecast still implies a contraction of 5.3 per cent (in GDP) yoy in H2."

"At the same time, the labour market will likely continue to deteriorate into H2, as more firms continue to reassess the viability of their operations," he added.

Among the STI constituents, ComfortDelGro emerged as the best-performing counter for the day, gaining 2.1 per cent or S$0.03 to S$1.46.

DBS analyst Yeo Kee Yan said in a report on Wednesday that ComfortDelGro will be a beneficiary from the increased demand for transport, as more workers return to workplaces after stints of working from home.

At the bottom of the blue-chip index was SATS, which fell 4.5 per cent or S$0.14 to S$2.96.

Across the Singapore bourse, QT Vascular remained most heavily traded stock, with over 581 million shares changing hands. Shares of the medtech firm ended the day down 5.9 per cent at 1.6 Singapore cents.

The company announced on Tuesday its plans to acquire a Mongolian mining and energy company for S$1 billion in cash and new shares. If completed, the transaction is expected to result in a reverse takeover of QT Vascular.

Meanwhile, Trek 2000 International found itself among the biggest decliners, falling 27.8 per cent to 6.5 Singapore cents.

The firm had on Tuesday said that legal proceedings against founder Henn Tan have "no impact on the company's operations and businesses. Tan stepped down from his position as chairman emeritus from June 29.

Asian stocks were mixed on Wednesday amid fresh virus concerns and bleak economic data. The FTSE Bursa Malaysia KLCI Index slipped 0.4 per cent; the Nikkei 225 Index lost 0.03 per cent. The Hang Seng Index and South Korea's Kospi were up 0.02 per cent and 0.1 per cent respectively.