STI falls 1.2% for third straight day on macro gloom, Covid-19 surge, US election risk

SINGAPORE shares posted its third straight day of losses as sentiments continued to be hurt by the Covid-19 surge, more global economic gloom and risks tied to the US election. Wall Street's wobbly session overnight added more salt to injury.

The key Straits Times Index traded under water all day and closed at a near five-week low of 2,483.48 after falling 29.39 points or 1.17 per cent.

Key Asian gauges fared mixed with Japan and Hong Kong falling 0.3 per cent while Malaysia slipped 0.5 per cent. Australia, China and South Korea advanced between 0.1 and 0.6 per cent.

"Trading the US election's risk fabric is becoming interwoven with assessing global downside economic risks from tightening social mobility measures in the euro zone," remarked Axi's Stephen Innes. A new wave of Covid-19 cases have hit many European countries including Russia, France and Italy, forcing some countries to impose new curbs.

"Localised beatdown in economic activity across the euro zone could drive broader doom and gloom on the global recovery in 2021 before a vaccine becomes available," he added.

On the other hand, DBS Group Research noted that Singapore has stabilised its Covid-19 situation; and while the economy is on the mend amid the phased reopening and recovery in some regional markets, the pick-up will be uneven.

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Overall trading volume in the Singapore market stood at 1.33 billion shares worth S$1.08 billion. Among the STI constituents, three counters were up and 24, down. Singapore's three banking stalwarts DBS, OCBC and UOB led the losses, which collectively lopped 15.3 index points off the STI.

Topping the day's most active list is Jiutian Chemical with some 250 million shares worth S$21.3 million changing hands. The Catalist counter closed up 0.1 Singapore cent or 1.2 per cent to 8.3 Singapore cents following the completion on Tuesday of a S$10.3 million share placement at an issue price of 6.03 Singapore cents.

SIA Engineering Co (SIAEC) lost five Singapore cents or 2.9 per cent to S$1.68. The aircraft maintenance, repair and overhaul (MRO) arm of Singapore Airlines issued a profit guidance on Wednesday morning which said it will recognise a non-cash impairment provision against its base maintenance unit's assets. This, it said, is expected to have a material impact on first-half fiscal year results.

DBS fell 42 Singapore cents or nearly 2 per cent to S$20.90. According to news reports, a digital currency exchange backed by South-east Asia's largest lender, DBS, is in the works. DBS is still in the process of seeking regulatory approval.