Singapore market trends Tuesday: Shares may steady after Wall Street erases dip

Singapore subway MRT escalator at One North; taken August 2018.Singapore MRT escalator at One North.

Singapore shares may steady on Tuesday after Wall Street managed an intraday recovery from initial sharp losses on Monday, but with many large investors already closing out their portfolios for the year, low volume may make trade volatile.

“It looks like a bit of a mixed bag for Asia after U.S. markets rebounded from sharp losses earlier in the day as U.S. investors turned bargain-hunting mode snapping up arguably oversold Facebook and Microsoft shares for holiday stocking stuffers,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Tuesday.

“However, let this be a stark reminder to investors just how frangible liquidity is at this time of year, which will exacerbate market movement even more so in this risk-averse environment,” he said.

Turmoil in the U.K. weighed on sentiment amid concerns it may impact global economic growth. Reuters reported early on Tuesday Asia time that parliament would hold an emergency debate on Prime Minister Theresa May’s decision to delay the scheduled vote on her Brexit deal, which had been expected to fail by a large margin.

Indexes

December futures for Japan’s Nikkei 225 index were down 90 points at 21,230 at 7:46 A.M. SGT, according to CME data, compared with the index’s close on Monday at 21,219.50.

Singapore’s Straits Times Index ended Monday down 1.24 percent at 3072.44; December futures for the index were at 3069 on Monday, while January and February futures were at 3071 and 3074.

Hong Kong’s Hang Seng Index fell 1.20 percent to end Monday at 25,752.381, while China’s CSI 300 was off 1.16 percent at 3144.763.

Malaysia’s KLCI index was off 1.03 percent at 1663.31 on Monday, while Indonesia’s IDX Composite shed 0.24 percent to 6111.36.

The Dow Jones Industrial Average ended Monday up 0.14 percent at 24,423.26 after a roller coaster session that saw the index dip as low as 23.881.37. The Nasdaq Composite was up 0.74 percent at 7020.521 and the S&P 500 added 0.18 percent to 2637.72. Futures for the three indexes were a bit lower in early trade.

Oil

Nymex WTI crude oil futures for January were down 0.02 percent at US$50.99 a barrel at 7:22 A.M. SGT after tumbling on Monday, while ICE Brent crude futures for February were off 2.76 percent at US$59.97 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

“Oil prices slipped for its worst loss in two weeks eroding all of last week’s gains,” Innes said.

“There remains a lot of uncertainty if the production cut is thick enough to make a significant dent in global supply, but price action does suggest a substantial tranche of market participants remain entirely unconvinced that a floor is in place,” he said. “The general risk-off tone in global markets and the stronger dollar on the back of haven flow is contributing to the selling pressure.”

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