Singapore market trends Friday: Wall Street extends tumble amid fresh US political concerns

Singapore street scene in Tanjong Pagar neighborhood; taken 31 August 2018.Singapore’s Tanjong Pagar neighborhood.

Santa appears to have left traders a lump of coal this year.

Singapore shares may face a tough end to the week on Friday as Wall Street extended its tumble on Thursday in the wake of fresh political ructions in the U.S.

Stephen Innes, head of Asia Pacific trading at OANDA, said on Friday that investors had another “frightening” session as multiple geopolitical issues sprang up amid dwindling year-end liquidity.

That ranged from the U.S. Federal Reserve policy statement earlier in the week, to U.S. President Trump’s continuing threat to shutdown government funding if his wall on the Mexican border isn’t financed, reversing his earlier agreement to sign a stop-gap funding bill, to the U.S. Department of Justice charging two Chinese nationals with allegedly hacking personal data and intellectual property.

“Traders debated everything from policy error to Christmas dinner,” Innes said in a note.

In another sign of chaos in the Trump White House, Defense Secretary Jim Mattis resigned on Thursday, with his resignation letter issuing a criticism of the U.S. president’s policy. Mattis had often been described as the only adult in the room in the Trump administration.

The resignation came amid widespread concern about Trump’s surprise, unilateral decision to pull U.S. troops out of Syria, a decision that brought broad criticism from both within and outside his own party, but met with the approval of Russian President Vladimir Putin.

Indexes

March futures for Japan’s Nikkei 225 index were down 5 points at 20,380 at 7:33 A.M. SGT, according to CME Group data. That compared with the index’s close at 20,392.58 on Thursday, down 2.84 percent.

Singapore’s Straits Times Index ended Thursday down 0.26 percent at 3050.62; December futures were at 3047 on Thursday, while January and February futures were at 3050 and 3052 respectively, according to SGX data.

Hong Kong’s Hang Seng Index fell 0.94 percent to 25,623.529 on Thursday, while China’s CSI 300 was off 0.77 percent at 3067.417.

Malaysia’s KLCI was down 0.31 percent at 1650.56 on Thursday, while Indonesia’s IDX Composite shed 0.46 percent to 6147.88.

The Dow Jones Industrial Average tumbled 1.99 percent to 22859.60, the Nasdaq Composite lost 1.63 percent to 6528.407 and the S&P 500 fell 1.58 percent to 2467.42. Futures for the three indexes were higher in early trade.

Oil

Nymex WTI crude oil futures for February were up 1.09 percent at US$46.38 a barrel at 7:21 A.M. SGT, while ICE Brent futures for February were down 5.05 percent at US$54.35 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

“Oil prices are getting caught up the risk off the vortex. The ‘herky-jerky’ moves are getting exaggerated by immensely thin liquidity conditions, risk sentiment, and holiday market participation. I expect this to continue into year-end,” Innes said.

“To say things are a bit negative out here could be a significant understatement,” he said, adding the milieu was “getting compounded by OPEC’s seemingly be rudderless efforts in these in these turbulent waters, which continues to underscore the fact that the latest production cuts are not sufficient to right the ship.”

Get the Shenton Wire morning briefing in your inbox