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Nikkei Markets

Singapore shares drift lower for fifth straight session

Investors brace for next round in tariff war

SINGAPORE (Nikkei Markets) -- Singapore shares struggled to shake off rising trade-related concerns and edged lower for the fifth consecutive session as investor wariness combined with a lack of fresh drivers to damp trade.

The Straits Times Index edged down 0.35% to close at 3109.91 Tuesday.

Malaysian markets were closed for a public holiday.

Escalating fears of an all-out trade war between the world's two largest economies have crippled investors' risk appetite of late and slammed emerging markets.

On Friday, U.S. President Donald Trump threatened tariffs on practically all Chinese goods, prompting China to say it would retaliate if that happened. Investors are also bracing for the Trump administration to announce a new round of tariffs on $200 billion of Chinese imports any day now.

The outlook for emerging markets continues to look quite fragile with the likelihood of further weakness up ahead, said Lukman Otunuga, research analyst at broker ForexTime.

IG Asia market strategist Jingyi Pan said technical indications show many markets, including Singapore, are already oversold. "It's difficult to put a finger on when a snap-back may happen but the short-term trajectory is negative," she added.

The STI has lost 3.1% over the past five days. Year to date, the gauge is down 8.6%.

Technology stocks dominated the top-losers list in Singapore, bucking the trend of their U.S. counterparts, which snapped a losing streak overnight.

Contract manufacturer Venture Corp. closed 1.25% lower while home-grown hardware maker Creative Technology dropped 1.38%.

Apple supplier Hi-P International fell 5.26%; semiconductor components manufacturer UMS Holdings lost 3.42%.

Media conglomerate Singapore Press Holdings lost 2.87%, erasing the gains it made in the previous session after announcing its purchase of several U.K. student hostels.

While the move was in line with the company's strategy to diversify its business, OCBC Investment Research cited uncertainty regarding European Union demand for British higher education due to Brexit as a risk factor.

Property stock UOL Group gained 1.2% while City Developments edged up 0.35%. According to media reports, home buyers showed strong interest at the preview of a new condominium over the weekend, a sign that recent property cooling measures have not had as severe an effect as feared.

Still, RHB Research Institute retained its neutral rating on the sector. "With muted expectations for property price growth, we see no near-term catalysts for players with larger exposure to Singapore's residential sector," RHB analyst Vijay Natarajan said in a note.

--Joannah Perez

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