STI sheds 0.3% amid continued economic toll from Covid-19

THE Straits Times Index (STI) fell 8.46 points or 0.33 per cent to close at 2,563.09 on Tuesday, as the workforce continues to feel the impact of the novel coronavirus pandemic on livelihoods.

DBS Group Research said on Tuesday that while policy measures "to help the vulnerable segments of society have helped to moderate job losses, the impact on income is nevertheless far more severe".

The best performer among the index's constituents was Singapore Technologies Engineering (ST Engineering), which gained 2.66 per cent for the day to close at S$3.48.

This comes after the government's announcement on Aug 17 of the extended Jobs Support Scheme, which DBS Group Research on Tuesday said will deliver "a shot in the arm" to the aerospace maintenance, repair and operations sector.

Analyst Suvro Sarkar added that ST Engineering's earnings trajectory for FY20/21 "now looks creditably close to flattish despite the pandemic".

Meanwhile, the biggest decliner for the day was Singtel, which lost 2.08 per cent to close at S$2.35.

Advancers outnumbered decliners 218 to 210 for the day, with 1.54 billion securities worth S$1.32 billion changing hands.

Across the region, Asian markets showed signs of optimism. The Hang Seng Index edged up 0.08 per cent to close at 25,367.38, while the benchmark Shanghai Composite Index gained 0.36 per cent to close at 3,451.09. The Jakarta Composite Index also closed up 0.9 per cent at 5,295.18.

The Nikkei 225 Index, however, declined for the second day in a row by 0.2 per cent to close at 23,051.08. This comes after news on Monday that Japan's economy shrank 7.8 per cent in the April to June quarter, the worst contraction in the country's modern history.

However, Gargi Rao, an economic research analyst at GlobalData, said on Tuesday that the Japanese economy is "set for a marginally better performance in the next two quarters, largely driven by workers who resumed their work; and opening up of business activities".