Wall Street’s overnight rally gave local shares a boost in the morning, but the momentum ran out by late afternoon. The change in mood left the Straits Times Index (STI) down 29.01 points, or 1.1 per cent, to 2,605.56.
This was despite a Wall Street surge prompted by signs of Covid-19 cases coming to a plateau in the United States.
Mr Stephen Innes, AxiCorp’s chief global markets strategist, noted that a V-shaped recovery is still far from sight and “there is still much to be worried about”.
“As virus curves continue to flatten, attention turns to when lockdowns can end… At the moment, evidence suggests that governments will continue to tread carefully.”
Investors would also have noted the grim forecast by the International Monetary Fund yesterday that the global economy would shrink by 3 per cent this year.
JPMorgan chief economist Bruce Kasman warned that such a slowdown would belt corporate earnings: “We project global profits to experience a roughly 70 per cent peak-to-trough decline this year.”
Losers trumped gainers 248 to 190, with 1.39 billion shares worth $1.58 billion changing hands here.
Jardine Strategic Holdings was the best performer, up 2.3 per cent to US$24.04.
The STI’s laggards were City Developments, down 5.6 per cent to $7.48, and Sats, 4.4 per cent lower at $3.01.
The most active was Singtel, which fell 0.7 per cent to $2.80 on trade of 52.6 million shares.
Another heavily traded stock was Genting Singapore, which closed flat at 74.5 cents.
OCBC Investment Research had a “buy” rating for Genting Singapore yesterday.
The banks closed in the red. DBS shed 1.8 per cent to $19.50, OCBC Bank fell 2.4 per cent to $8.90, while United Overseas Bank closed at $20.28, down 2 per cent.
The STI’s performance was in line with the region, with the exception of Malaysia, which rose 1.2 per cent.
Shanghai eased 0.6 per cent and Japan’s Nikkei dipped 0.5 per cent.
This was despite China cutting a key medium-term interest rate to record lows yesterday.
Indonesian shares tumbled 1.7 per cent, with communication services and financials the top losers.
“The central bank surprised the market by maintaining its benchmark rate… A worrying move amidst a weakening domestic economy,” said Mr Hariyanto Wijaya of Mirae Asset Sekuritas.
• Additional reporting by Agence France-Presse, Reuters