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Nikkei Markets

Singapore, Malaysia stocks fall after Wall Street selloff

U.S. equities tumble amid trade tensions between U.S. and China

KUALA LUMPUR (Nikkei Markets) -- Equities in Singapore and Malaysia declined Tuesday, after rising trade tensions and a rout in technology company shares led to a selloff on Wall Street.

Singapore's Straits Times Index declined 0.5% to 3,412.15 and Malaysia's FBM KLCI index fell 0.4% to 1,850.78. Lenders and rig builders paced losses on the STI, while heavyweight Tenaga Nasional led the KLCI's fall.

U.S. equities tumbled overnight, weighed by losses in technology companies. The 2.7% fall on the Nasdaq Composite came after President Donald Trump hit out at Amazon, tweeting that the U.S. post office is losing "a fortune" on account of deliveries for the e-commerce company while it benefits from favorable tax treatment.

Meanwhile, there were more worries for investors as the world's two largest economies edged closer to a potentially damaging trade war after Beijing raised import duties on $3 billion worth of U.S. imports. The increase was in response to Washington's tariffs on metals announced last month. The Trump administration, later this week, is expected to unveil a list of Chinese goods that may be subjected to U.S. tariffs announced for alleged intellectual property infringement.

Michael McCarthy, chief market strategist at CMC Markets & Stockbroking, said that caution was turning into fear "after China unveiled a tariff response" and amid "specific issues in U.S. tech shares."

On the STI, United Overseas Bank declined 1.6%, and DBS Group Holdings and Oversea-Chinese Banking Corp. declined 0.5% each after U.S. 10-year benchmark yield slid to a two-month low. A rising interest rate environment benefits net interest margins of lenders.

Keppel Corp. and Sembcorp Marine, the world's largest rig builders, fell 0.9% each after Brent crude prices declined by the most in nine months overnight.

Among technology stocks, Apple supplier Hi-P International closed 5.1% lower and high-tech design and manufacture firm Venture Corp. lost 1%.

Banyan Tree Holdings declined 0.9%. The company said its joint venture with Chinese real-estate developer China Vanke had acquired all the hotel assets of the Banyan Tree China Hospitality Fund for 1.35 billion yuan ($215 million).

In Malaysia, apart from the weak U.S. cues, there was caution over the upcoming national elections, analysts said. Reuters had reported on Monday, citing Economic Planning Unit Minister Abdul Rahman Dahlan, that the nation's parliament will likely be dissolved Friday.

With polls seen fast approaching, the second quarter of 2018 will likely be "the weakest but most volatile" period for the year, Kenanga Investment Bank's head of research Chan Ken Yew said. Chan expects 'lackluster' trading volume amid waning market interest over the next three months.

On the KLCI, television services provider Astro Malaysia Holdings was the day's top loser, falling 3.5%. Electricity utility company Tenaga Nasional declined 2.1%.

Malaysian construction and property company WCT Holdings dropped 1.6% after saying it plans to acquire a 60% stake in Subang Skypark terminal for 44.56 million ringgit ($11.5 million).

While the new asset could have development potential over time, the acquisition cost and consolidation of Skypark's debt "will add further strain on WCT's balance sheet," AmInvestment Bank analyst Joshua Ng said.

GFM Services rose 1% after securing a five-year contract to manage and maintain the state of Sabah's administration center.

--Alexander Winifred & Joannah Perez

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