Investors barely had time to enjoy the peace from the 90-day truce in US-China trade war before their hopes got extinguished by the arrest of Chinese telecom equipment giant Huawei’s CFO Meng Wanzhou at the request of the US government. The unexpected turn of events caught the market by surprise, leading to a sharp 800-point decline in the Dow Jones Industrial Average (DJIA) on 3 December which in turn triggered a sell-off in most major bourses.
While traders were left licking their wounds, more unpleasant announcements broke out which put further strains on their tense nerves. These include violent protests in Paris, challenges over Brexit deal, unimpressive US jobs data, declining oil prices as well as the inverted yield curve, all of which could threaten the inaugural of an economic recession.
Over the last two weeks, DJIA sank 2.9 percent to finish at 24,597.38 while Hang Seng Index fell by 1.6 percent to close at 26,094.79.
Turning our attention to the local shore, the political scene in Singapore was not calm at all either. Border disputes with Malaysia surfaced again as Malaysian vessels were reluctant to leave the maritime border off Tuas despite repeated objections raised by the Singapore government. Meanwhile, economists trimmed their forecast for Singapore’s growth next year down to 2.6 percent, in comparison to the projection of GDP growth for 2018 at 3.3 percent.
Cautious investors fled the equity market, resulting in six days of losses following the short-lived 2.3 percent rebound in the Straits Times Index (STI) on 3 December. Last fortnight, the STI dipped 1.3 percent to end at 3077.09.