Jun 10, 2016

    Asian markets sweat over Japan's rising yen

    THE Singapore market snapped its five-day winning streak yesterday as Asian equities fell into the red, dragged down largely by Japan.

    The benchmark Straits Times Index (STI) slid 18.58 points, or 0.65 per cent, to 2,843.8.

    This was even as Wall Street continued to ride on optimism that a June interest-rate hike is off the table, adding 0.37 per cent overnight.

    Tokyo fell 0.97 per cent amid a stronger yen, while Seoul shed 0.14 per cent, Sydney dipped 0.15 per cent and Kuala Lumpur pared 0.44 per cent.

    Shanghai, Hong Kong and Taipei were closed for holidays.

    China yesterday released data that showed deflationary pressures eased further last month, although consumer inflation came in below market expectations.

    "The main driver is still the yen story," said Kelvin Wong, City Index's chief technical strategist for Asia.

    "We now know June is a no-go for the next Fed rate hike, which has been good for the markets in the last few days," said Mr Wong.

    "But a delay in rate hike has also seen the yen strengthening, which amplifies the lack of confidence in the Japanese market. And this has spilled over to markets in Asia as a whole."

    At home, traders moved in for profit-taking on oil and gas-related plays as crude prices stayed close to their highest level this year.

    Sembcorp Industries dropped seven cents or 2.3 per cent to $2.95, while its rig-building arm, Sembcorp Marine, shaved 1.5 cents or 0.9 per cent to $1.71. Keppel Corporation slipped two cents or 0.3 per cent to $5.71.

    Ascendas Reit, which said it is selling its A-Reit Jiashan Logistics Centre in China for $26 million, closed flat at $2.34.

    The day's only gainers were Global Logistic Properties, which rose 3.5 cents or 1.9 per cent to $1.85, and Singapore Airlines, inching up one cent or 0.1 per cent to $10.60.

    Outside of the STI, agri-business Olam International eased one cent or 0.5 per cent to $1.89, following a morning announcement that it has acquired Alabama's biggest peanut sheller for US$85 million (S$115 million).

    The most active counter was AusGroup Singapore, which jumped 0.6 cent or 8 per cent to 8.1 cents on a turnover of 95.4 million units.

    Total trade across the bourse came up to 1.05 billion shares worth $913.1 million.