Singapore market trends Tuesday: Trade talk optimism may bolster shares

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Singapore’s shares may extend their gains on Tuesday, amid continued optimism for upcoming trade talks between the U.S. and China and on positive leads from Asian markets.

Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Tuesday that the market remained optimistic over the upcoming meeting between Chinese President Xi Jinping and U.S. President Trump.

Xi and Trump are set to meet at the G-20 meeting in Buenos Aires later this week, and optimism that at least a face-saving, if unsubstantive, agreement would emerge was running high among analysts.

U.S. President Trump told the Wall Street Journal that it was “highly unlikely” he would hold off on his planned increases to tariffs on Chinese goods.

Signs of trade war pain

But in what may be more signs of pain in the U.S. from his trade war, U.S. auto giant GM said on Monday that it would lay off 15 percent of its salaried workers and 25 percent of its executives, and stop production at five of its plants in the U.S. and Canada. The company said it aimed to change its product development and to focus on next-generation vehicles, including battery-electric ones.

GM has previously warned that the Trump administration’s trade war, which has included steel tariffs, would hurt its competitiveness and profit.

U.S. President Trump demanded GM “put something else in,” calling the move “not good,” and claiming he was “very tough” on GM CEO Mary Barra. “I have no doubt that, in a not-too-distant future, they’ll put something else,” Trump said inexplicably , given GM’s statement that vehicle sales were slowing.

Reuters reported he’d previously told GM workers in an Ohio speech that jobs would be coming back to the state. Trump reportedly told the Wall Street Journal that GM should stop making cars in China and make them in the U.S. instead; nearly all of GM’s China production is sold in China.

Indexes

Japan’s Nikkei 225 index was up 0.41 percent at 8:20 A.M. SGT, while South Korea’s Kospi was up 0.30 percent at 8:25 A.M. SGT.

Singapore’s Straits Times Index tacked on 1.34 percent to end Monday at 3093.38; November futures for the index were at 3093 on Monday, while December and January futures were at 3091 and 3093 respectively.

Hong Kong’s Hang Seng Index was up 1.73 percent to end at 26,376.18, while China’s CSI 300 was down 0.07 percent at 3141.243.

Malaysia’s KLCI ended Monday up 0.36 percent at 1701.99, while Indonesia’s IDX Composite was up 0.28 percent at 6022.78.

The Dow Jones Industrial Average ended up 1.46 percent at 24,640.24, the Nasdaq Composite was up 2.06 percent at 7081.853 and the S&P 500 gained 1.55 percent to 2673.45. Futures for the three indexes were lower in early trade.

Currencies

The U.S. dollar index, which measures the buck against a basket of currencies, was at 97.06 at 7:05 A.M. SGT, climbing from as low as 96.67 earlier in Monday’s session, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 3.06 percent at 8:12 A.M. SGT after spiking as high as 3.075 percent in Monday’s session, according to Tullett Prebon data.

The euro/dollar was at 1.1334 at 8:17 A.M. SGT after trading in a 1.1322 to 1.1384 range on Monday, according to DZHI data.

The British pound/dollar was at 1.2809 at 8:17 A.M. SGT after trading in a 1.2794 to 1.2864 range on Monday, according to DZHI data.

The dollar/yen was at 113.49 at 8:18 A.M. SGT after trading in a 112.85 to 113.651 range on Monday, according to DZHI data.

The dollar/yuan ended Monday at 6.9396 after trading in a 6.9330 to 6.9476 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3749 at 8:18 A.M. SGT after trading in a 1.3720 to 1.3757 range on Monday, according to DZHI data.

The dollar/Malaysian ringgit ended Monday at 4.1860 after trading in a 4.1850 to 4.1970 range during the session, according to DZHI data.

The dollar/Indonesian rupiah ended Monday at 14,470 after trading in a 14,450 to 14,649 range during the session, according to DZHI data.

Oil

Nymex WTI crude oil futures for January were down 0.06 percent at US$51.60 a barrel at 7:22 A.M. SGT, while ICE Brent crude oil futures for January were up 2.86 percent at US$60.48 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

“Oil prices staged a relief rally overnight as the great bottoming out debate sets in after chatter and speculation picked up that a global rebalancing agreement to cut output will come out of a sideline meeting between Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin at this weeks G-20,” Innes said.

“But as OPEC’s next balancing act unfolds, it will be tough to defeat the bearish markets forces in play while delivering a production cut with enough sting without provoking the ire of President Trump,” he added.

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