Singapore shares drop 1.5% on Monday; in the red for 2019

MONDAY'S performance in Asia's equity markets was expected after trade tensions between the US and China kicked into overdrive during the weekend. Its impact was felt in Singapore, with the local benchmark now posting losses on the year.

The trade squabbles - a dent on risk-on sentiment - sent the Straits Times Index (STI) sliding to below last year's closing of 3,068.76. It ended at 3,065.33, down 45.02 points or 1.5 per cent.

Markets in Australia, China, Hong Kong, Japan, Malaysia and South Korea all faced sharp sell-offs at the opening bell on Monday though there was some recovery towards the end of the sesion.

Of the lot, the Hang Seng fared the worst, shedding 499 points or 1.9 per cent to close at 25,680.33. Hong Kong stocks were dealt a double blow with US-China trade tensions and domestic issues of its own, as protests in the territory are now into its 12th week.

In Singapore, trading volume clocked in at 1.58 billion securities, 32 per cent over the daily average in the first seven months of 2019. Total turnover came to S$1.11 billion, 90 per cent of the January-to-July daily average.

Across the market, decliners trumped advancers and 332 to 119. The blue-chip index fared worse, with all but two of the STI's 30 closing in the red.

One of them, Yangzijiang Shipbuilding, was the most active on the STI. On 43.6 million shares traded, the shipbuilder posted strong gains on the day, closed three Singapore cents or 3.6 per cent higher at 94.5 Singapore cents. Its shares remain volatile due to ongoing investigations by Chinese authorities of an individual with close links to the firm.

With risk-on sentiment clearly in the recline, the local banks were lower Monday. DBS Group Holdings closed S$0.30 or 1.2 per cent lower at S$24.09; OCBC Bank retreated S$0.09 or 0.8 per cent to S$10.54 and United Overseas Bank ended at S$24.45, dipping S$0.20 or 0.8 per cent.

Worries of a global recession are mounting after trade relations between the US and China took a turn for the worse, with five STI components closing at multi-year lows.

This includes Sembcorp Industries (down $0.08 or 3.6 per cent to S$2.13), Singapore Press Holdings (down S$0.05 or 2.5 per cent to S$1.99), Singapore Airlines (down S$0.03 or 0.3 per cent to S$8.86), Hutchison Port Holdings Trust (down one US cent or 6 per cent to 15.7 US cents) as well as the Jardine group's Dairy Farm International (down US$0.12 or 1.7 per cent to US$6.80).