Singapore market trends Tuesday: Negative leads in early trade amid US economic concerns

Knife display at Daiso in SingaporeKnife display at Daiso in Singapore

Singapore shares may start Tuesday on the back foot, with negative leads from early Asian trading as markets remain jittery over geopolitical tensions, the U.S. trade war and ill winds blowing over the U.S. economy.

Read more: Singapore stocks to watch Tuesday: Mapletree Logistics, Keppel-KBS, Raffles Infrastructure, China Jinjiang

“Risk aversion continues to permeate every pocket of the markets whether triggered by President Trump’s latest tweets on immigration or the blustery headwinds from Riyadh to Rome,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Tuesday. “Markets remain shrouded in a thick blanket of risk.”

Others pointed to concerns over the U.S. economic outlook.

Tax cut concerns

“We believe it is still true that Republicans gave the American people the Tax Cuts and Jobs Act, but now consumers have spent every last dollar they were given, leaving nothing for a rainy day and nothing left to power economic growth next year,” Chris Rupkey, chief financial economist at MUFG Union Bank, said in a weekly outlook published Monday. “Tax cuts boost spending for one year at most.”

He added that most Americans also aren’t aware of their final tax bill this year yet because the tax forms aren’t currently available to tax preparation software companies.

“There could be a rude awakening for many taxpayers when they find out their withholding rates were reduced, but they will actually end up owing more next April,” he said.

Rupkey also pointed to Republican rumblings over cutting Social Security payments after the tax cuts failed to pay for themselves via faster economic growth and instead spurred huge budget deficits.

Indexes

Japan’s Nikkei 225 index dropped 1.10 percent by 8:06 A.M. SGT, while South Korea’s Kospi shed 0.76 percent by 8:12 A.M. SGT.

Singapore’s Straits Times Index ended Monday up 0.51 percent at 3078.06; October futures for the index were at 3073 on Monday, while November and December futures were at 3076 and 3073 respectively.

Hong Kong’s Hang Seng Index jumped 2.32 percent to 26,153.15 on Monday, while China’s CSI 300 index surged 4.32 percent to 3270.273.

Malaysia’s KLCI index ended Monday down 0.56 percent at 1722.47, while Indonesia’s IDX Composite edged up 0.05 percent to 5840.44.

“Chinese President Xi Jinping jawboned the market over the weekend by pledging ‘unwavering’ support for private companies and that continued the efforts on Friday to suggest PBOC and regulatory officials are working to provide market supports,” Scotiabank said in a note on Monday.

The Dow Jones Industrial Average shed 1.27 percent to 25,379.45, the Nasdaq Composite added 0.26 percent to 7468.629 and the S&P 500 shed 0.43 percent to 2755.88. Futures for the three indexes were nose downward in early trade.

Currencies

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 96.03 at 7:52 A.M. SGT, near Monday’s high of around 96.09, which was touched after rising from as low as 95.48 earlier in the previous session, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 3.195 percent at 7:59 A.M. SGT after touching levels as high as 3.205 percent and as low as 3.179 percent in Monday’s session, according to Tullett Prebon data.

The euro/dollar was at 1.1464 at 8:06 A.M. SGT after trading in a 1.1454 to 1.1550 range on Monday, according to DZHI data.

The dollar/yen was at 112.738 at 8:06 A.M. SGT after trading in a 112.32 to 112.886 range on Monday, according to DZHI data.

The dollar/yuan ended Monday at 6.9445 after trading in a 6.9283 to 6.9450 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3808 at 8:07 A.M. after trading in a 1.3755 to 1.3808 range on Monday, according to DZHI data.

The dollar/Malaysian ringgit was at 4.1600 at 8:04 A.M. SGT after trading in a 4.1530 to 4.1590 range on Monday, according to DZHI data.

The dollar/ Indonesian rupiah ended Monday at 15,180 after trading in a 15,175 to 15,200 range during the session, according to DZHI data.

Oil

Nymex WTI crude oil futures for December were up 0.07 percent at US$69.17 a barrel at 2:29 A.M. SGT, while ICE Brent crude oil futures for December were up 0.06 percent at US$79.83 a barrel at 5:59 P.M. SGT, according to Bloomberg data.

Read more: Crude oil heads higher on Tuesday in Asia on API estimates

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