Global jitters hit regional, local bourses
CONCERNS over the faltering global economy sent the local bourse deeper into the red yesterday and hit major markets across Asia.
The growing sense of gloom left the benchmark Straits Times Index down 17.28 points, or 0.53 per cent, to 3,226.71.
It was much the same elsewhere in the region. Hong Kong's Hang Seng Index fell 0.7 per cent, ending three straight days of gains, while the Nikkei in Tokyo shed 1.2 per cent, Seoul slipped 0.4 per cent and Taiwan tumbled 1 per cent.
Shanghai was the exception, rising 0.8 per cent. Markets in China reopened yesterday after a week-long public holiday.
The catalyst for the blood-letting was the International Monetary Fund (IMF), which cut its global growth forecast for this year from 3.7 per cent to 3.3 per cent.
It also downgraded its projection for next year to 3.8 per cent from the previously forecast 4 per cent. On top of that, its report warned yesterday that stock markets could do with a correction as some valuations "could be frothy".
The IMF report triggered a sell-off in the United States and Europe on Tuesday night that spilled over to Asia.
"We have been going through a seasonally weak period of the year for shares. The September quarter is historically the weakest quarter of the year," said Singapore-based Shane Oliver, global strategist at AMP Capital Investors.
"The global economic recovery has proved yet again to be fragile and uneven. The correction in shares could go further."
Massage-chair maker Osim International took the spotlight here, tumbling 10 cents, or 4.1 per cent, to $2.33 after falling 4 per cent on Tuesday.
The Singapore Exchange queried the firm around noon yesterday about "unusual" trading activity. Osim replied that it had no idea why the share price dropped.
"There are currently no ongoing discussions regarding any joint ventures, mergers, acquisitions or purchases or sales of any significant assets," it said.
Sembcorp Marine gained four cents to $3.62 after OCBC Investment Research said the recent sell-down in the counter had been too aggressive.
OCBC said the fall of about 10 per cent since early last month was likely due in part to weaker oil prices and worries over execution risks for its new drillship.
"According to our checks, the first drillship has finally left for Brazil," it said.
The most active counter was International Healthway, which was flat at 27 cents on a turnover of 92.4 million shares.