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STI tumbles 1.3% on weak export data, Wall Street’s overnight losses

SINGAPORE – Local shares had nowhere to go but down on Wednesday following Wall Street’s overnight losses and the release of weak export data which raised the risk of a technical recession here.

The Straits Times Index (STI) tumbled 40.2 points or 1.3 per cent to 3,173.84, after US stocks retreated on the back of mixed economic data, weak corporate results and the ongoing debt-ceiling negotiations in Washington.

Losers outnumbered gainers 341 to 227 on trade of 1.3 billion units worth $1.3 billion.

Key gauges across the region had a mixed day with Japan, South Korea, Malaysia and Taiwan posting gains, while falls were recorded in Hong Kong, China and Australia.

Singapore’s non-oil domestic exports extended their decline in April for the seventh straight month, as shipments to China contracted sharply. Analysts warn that Singapore may slip into a technical recession if the boost from China’s reopening fails to materialise in the second quarter.

This would exert more downward pressure on the STI in the second half of this year, said Mr Kelvin Wong, Oanda senior market analyst for the Asia-Pacific, who also noted that the index has underperformed the rest of the world.

CapitaLand Ascendas Reit was the day’s third-most active counter, with 43.9 million shares exchanging hands.

The trust announced before trading resumed after a halt on Tuesday that it had closed its private placement at $2.727 apiece to raise gross proceeds of $500 million. The funds will be used to partially fund its acquisition of Seagate’s facility and to repay debt. The units fell 3.5 per cent to $2.78.

Singapore Airlines gained 1.5 per cent to $6.01. The airline reported a half-year net profit of $1.23 billion, led by strong demand for air travel. This enabled the group to post earnings of $2.2 billion for the full year – a record in its 76-year history – versus last year’s loss of $962 million. THE BUSINESS TIMES