Asia downbeat as Wall Street retreats

MONDAY BLUES: Wall Street saw a selldown on Friday, setting the scene for a downbeat session in Asia, with the STI down 0.6 per cent and Japan dropping 1.7 per cent.


    Apr 08, 2014

    Asia downbeat as Wall Street retreats

    SINGAPORE shares headed south amid a regional selldown yesterday, spooked by Friday's weak finish on Wall Street.

    The benchmark Straits Times Index (STI) dipped 19.13 points - or 0.6 per cent - to 3,193.59, for its third decline in the past four sessions.

    Volumes remained muted, with just 1.7 billion shares worth $901.1 million changing hands.

    A broker said: "The market has been mostly quiet for weeks and months. Soon, investors will be focusing on World Cup football and it could get even quieter."

    Dealers said investor sentiment has been dampened by an ongoing investigation - involving more than 10 top executives from seven firms and several subsidiaries - into suspected trading irregularities in several penny stocks.

    Despite a decent job report, Wall Street was rattled by a late selldown on Friday, with the Dow Jones Industrial Average falling nearly 1 per cent and the S&P 500 sliding 1.25 per cent. The technology-laden Nasdaq saw its heaviest intraday loss for the year, tumbling 2.6 per cent.

    These set the scene for a downbeat session in the region yesterday, with Japan dropping 1.7 per cent, Hong Kong dipping 0.6 per cent and Australia shedding 0.2 per cent.

    Regional analysts said yesterday's rout is unlikely to be prolonged, given how the United States' economic recovery is fast gaining traction.

    Here, 19 of the 30 STI component counters went south, with just five gainers and six unchanged.

    The losers included commodities trader Noble Group, which slumped almost 5 per cent and dropped six cents to $1.22 as investors continued to take profit.

    Magnus Energy crashed 22.2 per cent, or 0.4 cent, to 1.4 cents, after it said that executive director Koh Teng Kiat and chief financial officer Luke Ho Khee Yong have had their passports impounded as part of the ongoing probe.

    Similarly, Annica Holdings plunged 33.3 per cent or 0.5 cent to one cent after it said that chairman and executive director Edwin Sugiarto is part of the Commercial Affairs Department's investigation.

    The day's most active counter was HanKore Environment, which shed 0.4 cent to 12.9 cents, with 118.7 million units done.

    Overall, analysts are still upbeat on this year's prospects for stocks, although they tip near-term turbulence.

    "We often see a correction around the mid-year that can start about May and continue into the September quarter," said Mr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors. "This would just be a correction in a rising trend, as share market fundamentals remain favourable."