LOCAL shares began the week on a softer note as Covid vaccine availability, renewed pandemic-induced lockdowns in some countries and tense US-China trade talks continued to weigh on investor optimism.

The benchmark Straits Times Index (STI) fell 0.2 per cent or 6.46 points to finish the first trading day of the week at 3,128.08. Across the broader market, advancers outnumbered decliners 247 to 226, after 1.85 billion securities worth S$1.41 billion changed hands.

The bearish sentiments were evident in markets across the region. The Nikkei 225 lost 2.1 per cent; the Hang Seng Index fell 0.4 per cent, while the KLCI shed 0.6 per cent.

Meanwhile, the Kospi and Jakarta Composite Index lost 0.1 per cent and 0.9 per cent respectively.

Stephen Innes, chief global market strategist at Axi, noted that Asia "hasn't been spared the wrath of higher US rates". However, the likely protracted recovery in local demand across the region appears to be a more significant factor, he noted.

"A significant issue here is tourism: without it revving up again, many economies will sputter for lack of horsepower. And with the vaccine roll-out proceeding far more slowly than in the West, it'll take time before the Covid economic brakes come off," said Mr Innes.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Among the 30 constituent counters, only eight ended the day in the black. City Developments was the biggest index gainer, adding 3 per cent or S$0.23 to S$7.89. Wilmar International was another constituent advancer, gaining 2.3 per cent or S$0.12 to S$5.39.

Meanwhile, Singtel was the biggest loser on the index. The counter finished the day at S$2.36, down 1.3 per cent or S$0.03.

Across the bourse, Jardine Matheson Holdings was the biggest decliner. The stock fell 0.7 per cent or US$0.50 to US$66.70.

The trio of local lenders ended the day in the red. DBS fell 0.5 per cent or S$0.13 to S$28.38; UOB shed 0.5 per cent or S$0.12 to S$25.45, while OCBC lost 0.7 per cent or S$0.08 to S$11.54.

AusGroup was the most heavily traded stock, with some 175.8 million shares changing hands over the course of the day. The counter closed at 3.3 Singapore cents, up 6.5 per cent or 0.2 Singapore cent. Other actively traded counters for the day were Ley Choon, OKH Global and Oceanus.