Singapore, Malaysia stocks fall on lower U.S. bond yields, crude oil prices
SINGAPORE (Nikkei Markets) -- Singapore shares fell to a near one-month low on Wednesday, as a decline in U.S. bond yields weighed on banking stocks and a fall in crude oil prices hurt rig builders. Malaysia shares, tracking weak regional cues, edged lower.
The Nikkei Asia300 index slipped 0.6% as U.K. Prime Minister Theresa May's call for a snap election in June added another layer of uncertainty for global markets. The move for the election comes at a time when Britain is in the process of negotiating the details and terms of its exit from the European Union. Some investors bet that the surprise announcement will further undermine the risk appetite, already weakened by the rise in geopolitical tensions. Markets also await the first round of voting in the French presidential elections this weekend. An eventual win for the right-wing candidate Marine Le Pen could spell more instability for the EU.
"Politics dominates markets," Chris Weston, chief market strategist at IG, wrote in a note. "We now have a U.K. election on 8 June to contend with, although this clearly does not have the far reaching implications that the French elections hold if a Marine Le Pen victory emerges."
Singapore's FTSE Straits Times index fell 0.4% to 3,126.28. DBS Group Holdings declined 0.7% and United Overseas Bank dropped 0.3% after the U.S. 10-year bond yield dropped to an over five-month low on Tuesday. A decline in U.S. bond yields hurts banks' interest rate margins.
Sembcorp Marine lost 3.6% and Keppel Corp. 2.6%, as crude oil prices sank to a near two-week low.
Singapore's largest commercial real-estate investment trust CapitaLand Commercial Trust Management rose 0.6% after reporting a first-quarter distributable income of S$71.3 million ($51.2 million) compared with S$64.8 million a year ago.
Singapore Technologies Engineering rose 1.1% after its electronics arm won contracts worth S$464 million in the first quarter.
The FTSE Bursa Malaysia KLCI fell 0.1% to 1,738.95. Petronas Gas was the top loser, falling 3.1%. Westports Holdings was down 2.7%.
Malaysia's consumer price index rose to an over eight-year high in March, driven mostly by costlier fuel and due to a low base last year, official data showed Wednesday. The index rose 5.1% in March from a year earlier, slower than the median 5.2% increase predicted by nine economists in a Nikkei Markets poll and higher than February's 4.5%.
Capitaland Malaysia Mall fell 1.9% after Kenanga Investment Bank cut its target price to 1.59 ringgit from 1.62 ringgit on lower earnings. It cut earnings estimates for 2017 and 2018 by 4% after reducing rental reversions closer to current levels. Capitaland Malaysia Mall Trust said on Tuesday first-quarter net income fell nearly 2% from a year earlier.
Petronas Dagangan was unchanged at 24.08 ringgit. The gasoline retailer plans to spend about 400 million ringgit ($90.79 million) to 500 million ringgit this year as compared with 200 million ringgit spent a year-ago.
--Nimesh Vora and Kevin Lim
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.