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=ASIA MARKETS: Singapore Slips, Malaysia Ekes Out Meagre Gains Amid Escalating Trade War

KUALA LUMPUR (Jul 11) -- Singapore stocks fell Wednesday amid heightened caution following latest escalation in the U.S.-China trade conflict while Malaysia managed to eke out meagre gains thanks to select purchases of heavyweight stocks.

The Straits Times Index ended 0.8% lower at 3249.08 as finance and plantation sectors declined. The FBM KLCI closed 0.1% higher at 1688.77 largely due to gains in index constituents Genting and Public Bank even as most other stocks in Malaysia fell.

Investors may have booked profits in view of rising trade tensions, said CMC Markets Analyst Margaret Yang. China’s reaction to the new set of tariffs will be key to future market movements, she said.

China’s Commerce Ministry vowed to retaliate after the U.S. threatened more tariffs by publishing a list of an additional $200 billion-worth of Chinese imports that may be hit with 10% tariff after a public consultation period that is due to end Aug. 30.

Adding to the anxiety is the Malaysian central bank’s statement cautioning that the “balance of risks to outlook has tilted to the downside” amid global trade tensions. Bank Negara Malaysia also warned of further capital outflows and financial market adjustments in some emerging economies.

“Investors are holding on to cash,” said Goh Kay Chong, a broker at S.J. Securities in Malaysia. “Foreign investors are still net sellers of Malaysian equities, and the index seems to be trading sideways.”

Higher tariffs on electronics, a key plank of Singapore’s economy, weighed heavily on export-oriented manufacturers. Contract manufacturer Venture Corp and Apple supplier Hi-P International fell 4.0% and 3.2%.

Lenders in Singapore also suffered. Oversea-Chinese Banking Corp lost 2%, while United Overseas Bank shed 1.5%. DBS Group Holdings dropped 1.1%.

Plantation stocks retreated tracking a 2.2% drop in palm oil futures after data from Malaysia showed higher-than-expected stockpile ahead of seasonally strong production period. Singapore’s Golden Agri Resources fell 6.9% while FGV Holdings of Malaysia fell 1.3%.

- By Alexander Winifred and Joannah Perez;; +603-20267363
- Edited By Jason Ng
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