STI fails to build on its rebound, down 1.7% on Wednesday

SINGAPORE'S Straits Times Index (STI) failed to build on Tuesday's rebound, when the benchmark had its best session in over a year.

Nonetheless, Wednesday trading did get off to a good start, with the STI opening 0.9 per cent higher. However, those gains were reversed as the session progressed and the blue-chip index ended the day 48.82 points or 1.7 per cent lower at 2,783.72.

Twenty-four of the STI's 30 components ended the day in the red.

Oanda Asia-Pacific senior market analyst Jeffrey Halley said: "Tuesday's recovery, although pleasing, looked very much like a bullish correction in a bear market."

Moods were lifted after a strong session on Wall Street but fizzled out as worries over the Covid-19 outbreak continue to fester and doubts emerged over whether US fiscal measures - yet to be announced in full detail - would be substantial.

Oil prices failed to rally too with the West Texas Intermediate and Brent giving back early gains during the Asian session to trade around US$33 a barrel and US$36 a barrel, respectively.

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Singapore Deputy Prime Minister Heng Swee Keat said at the ST-BT Budget Roundtable dialogue on Wednesday that the government has started work on a second stimulus package, but that news did not have a notable impact on markets.

Among STI counters, conglomerate Keppel Corp fell S$0.15 or 2.6 per cent to S$5.55 to close at its lowest since December 2016. 

Even though the recent slump in oil prices might hurt Keppel's sizeable offshore and marine business, RHB Research analyst Leng Seng Choon noted Keppel shares were trading at attractive levels. He added that its property segment "should help support the conglomerate's share price and dividends".

Singapore's banks also resumed their slide. DBS dropped S$0.48 or 2.2 per cent to S$21.01, OCBC Bank finished S$0.22 or 2.3 per cent lower to S$9.50, and United Overseas Bank ended the day at S$21.37, falling S$0.57 or 2.6 per cent.

With the lenders hovering at recent lows, Krishna Guha, a research analyst at investment bank Jefferies, pointed out that the trio have historically resilient earnings and dividend cushion. Dividend yields for the banks are also at levels not seen since the global financial crisis more than a decade back.

One of the biggest losers in percentage terms was Singapore Exchange (SGX), which fell S$0.34 or 3.7 per cent to S$8.85. Traders were likely to have taken profit on the bourse operator after its 6.3 per cent jump on Tuesday, which followed market data showing that SGX's market turnover increased during February on higher volatility.

Citi Research analysts said in a note that jittery markets seem "to be helping both equities and derivatives turnover trends even in February 2020, with March and beyond potentially seeing continued volatility".

Trading volume on the SGX on Tuesday was 1.94 billion securities. Total turnover was S$2.06 billion. Decliners trumped advancers 324 to 155.

Elsewhere in the Asia-Pacific, benchmarks in Australia, China, Hong Kong, Japan, South Korea and Taiwan were all lower. Bucking the trend was Malaysia's Kuala Lumpur Composite Index, which added 0.9 per cent.