Singapore shares close 0.32% lower

THE Singapore bourse shrugged off the “better-than-expected” outcome of the historic US-North Korea summit held in the city state with the key Straits Times Index retreating 11 points or 0.32 per cent to finish at 3,430.69 on Tuesday.  

The STI stayed in the red for most of the day after logging brief gains in the early hour. Turnover was somewhat subdued with some 1.69 billion shares worth S$967.9 million versus Monday’s 1.8 billion shares worth S$968 million.

Losers outpaced gainers with 227 counters down and 155 counters up.

The breakthrough made at the summit between US President Donald Trump and North Korea’s Kim Jong Un was significant - Kim’s government committed to work towards the “complete denuclearisation of the Korean peninsula” and for a “lasting and stable peace”.

Even so, the optimism was tempered by realism with analysts acknowledging that the process itself could be long drawn out.  Its regional counterparts saw mixed trading with South Korea’s Kospi closing flat - down 0.05 per cent - while key indices in Japan, Hong Kong and China saw gains and Malaysia  finished in the red. 

The summit aside, traders seem more jumpy over what lies ahead for the rest of the action-packed week as key central banks meet and a string of macro data are due to be released including May inflation figures out of US - the world’s largest economy.

Never too far behind is fears over global trade wars, particularly after the hostile ending of the weekend’s G7 summit and the potential retaliatory measures by US allies. The end-week also marks a crucial deadline for the US that has said it will unveil the list of Chinese imports to be taxed by additional levies.

What’s happening in the trade arena - not the outcome of the Singapore summit - is “I personally believe, a far, far bigger existential global threat”, said ING’s chief economist and research head of Asia Pacific, Rob Carnell.

“The EU (European Union) is ready to put tariffs on the US on July 1. I anticipate retaliation for their retaliation to follow soon after, and then some retaliation to that retaliation etc - this gets ugly fast. It is on a global scale. And there are no winners,” he warned.