SINGAPORE blue chips failed to sustain the momentum at market open on Tuesday (Feb 4) with the benchmark index Straits Times Index (STI) down 3.46 points or 0.1 per cent lower at 3,823.01 at the close.
Across the broader market, gainers trumped decliners 311 to 221, after 1.3 billion securities worth S$1.2 billion changed hands.
The STI showing bucked the trend seen in regional bourses, after United States President Donald Trump delayed the start of tariffs on Mexico and Canada for a month.
But those on China were not deferred and were live on Tuesday, triggering retaliatory moves from the Asian economic powerhouse.
“The latest escalation in trade tension is snuffing out optimism, fuelling a flight to safety, and keeping markets trapped in a cycle of volatility-driven whiplash,” said Stephen Innes, managing partner of SPI Asset Management.
With de-escalation unlikely for the immediate period, markets should prepare for more volatility and more uncertainty, he warned.
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Singapore may suffer collateral damage as Trump’s tariffs pave the way for a global trade war, analysts earlier told The Business Times.
The Republic is unlikely to be on the “hit list for direct tariffs” from the US, but the city-state could still be affected indirectly if there is any “degradation” in economic integration, global supply chains and world trade, Minister for Foreign Affairs Vivian Balakrishnan said in Parliament on Tuesday.
Sats shares declined 1.8 per cent or S$0.06 to S$3.29, as the revocation of a rule – one that previously allowed small packages valued under US$800 to enter the US without incurring tariffs – could hit the air cargo handler more than the tariff hikes.
This is because cross-border e-commerce has been the most important driver for global air cargo volume in the past years, forming 20 to 25 per cent of the global air cargo volume today, noted UOB Kay Hian in a report on Tuesday.
Global air cargo handling is the biggest revenue contributor to Sats, added the brokerage, with the US air cargo market generating about 25 per cent of Sats group revenue.
“A potential decline in air cargo handling volume would negatively impact Sats’ earnings,” said UOB Kay Hian.
CapitaLand Investment shares climbed 1.7 per cent or S$0.04 to S$2.46 after the asset manager announced it will invest more than US$700 million in a freehold land parcel in Osaka, Japan, to develop a data centre with 50 megawatts of capacity.
The investment will seed a future data centre fund, it said.
