Mar 10, 2015

    Asian bourses fall on strong US jobs report

    MOST bourses across Asia, including Singapore's, fell yesterday after a stronger-than-expected American jobs report stoked expectations that the Federal Reserve could raise interest rates sooner than previously thought.

    The Straits Times Index might have lost more ground but for anticipation among investors of the European Central Bank's 1.1 trillion euro stimulus spurring the euro zone's fastest economic growth since 2007.

    The STI closed at 3,404.57 points, down 12.94, with 1.14 billion shares worth $1.14 billion changing hands.

    Elsewhere in Asia, Japan shed 0.6 per cent, Hong Kong sank 0.2 per cent, Indonesia fell 1.3 per cent and Thailand lost 0.6 per cent. The Shanghai Composite Index bucked the trend, closing 1.9 per cent higher.

    "Fears of the impending rate hike overshadowed how well the United States economy is doing. As we approach April and May, the 3,400 support may give way as rate hike concerns grow," Phillip Futures investment analyst Howie Lee said.

    "We are at a critical juncture, with hawkish economists predicting a rate hike as early as next month. So this month is a critical month. The Federal Open Market Committee statement next week will have a big say on whether the Fed implements a rate hike next month," he said.

    The US economy added 295,000 new jobs last month - more than forecast - and the jobless rate fell to a more than 61/2 year low of 5.5 per cent. This has raised expectations that the Fed may at its meeting this month drop the regular reference to "patience" on the timing of a rate hike, opening the door for an early rate rise.

    At home, Singtel weighed down the market, slipping 1.7 per cent or seven cents to $4.11, with 22.8 million shares changing hands; and Noble Group, the most actively traded stock yesterday, slid 5.2 per cent or 5.5 cents to $1, with 75 million shares traded.

    The commodity trader went ex-dividend yesterday, which means investors who bought shares from here on are not entitled to participate in Noble's 0.95 cent dividend payable on March 20.

    Genting Singapore gained 3.8 per cent or 3.5 cents to 96 cents, with 36.2 million shares traded on media reports that Resorts World Sentosa plans to raise $2.27 billion in bank loans.

    The proceeds will be used for refinancing and general corporate purposes, according to Bloomberg.

    Meanwhile, the 30 blue-chip STI constituent stocks generated a combined net income of almost $33 billion over calendar 2014, and paid out $14 billion in dividends in the same period, according to an SGX MyGateway report yesterday.