Gloomy start to the week for STI
THE local market started the week on a dour note, likely taking its cue from the massive sell-off on Wall Street last week.
The Dow Jones Industrial Average wiped out all the gains it had made so far this year within two dizzying sessions, ending the week lower than where it had begun at the start of the year.
The bloodshed was not so drastic here, where the benchmark Straits Times Index dropped 26.02 points, or 0.78 per cent, to 3,318.4 yesterday.
Other Asian markets were mixed - Tokyo lost 0.31 per cent and Sydney slipped 0.28 per cent, but Hong Kong rose 0.28 per cent and Shanghai surged 1.74 per cent.
Analysts blamed troubles in Argentina, which has defaulted on its debts, and a banking crisis in Portugal for dragging down sentiment across the world. However, they are still upbeat about Asia's prospects.
Mark Matthews, the head of Asia research for Bank Julius Baer, told Bloomberg: "We're going to see an acceleration in economic growth for many parts of the world, including Asia. I still think it's onwards and upwards for the markets.
"The Chinese economy is showing modest improvements. The worst is behind us in terms of the bad news from China."
China's manufacturing output rose last month at its fastest pace in over two years.
A report from the Singapore Exchange yesterday noted that the STI is in good shape, ending last month 3.6 per cent higher despite declines in United States stock markets.
The five blue chips that contributed the most towards the STI's movements last month were Olam International, Jardine Cycle & Carriage, United Overseas Bank, SIA Engineering and Jardine Strategic Holdings.
Olam slipped three cents to $2.43 yesterday, Jardine Cycle & Carriage gained four cents to $46.34, UOB fell 24 cents to $22.94, SIA Engineering dropped six cents to $4.61 and Jardine Strategic added 31 US cents (39 Singapore cents) to US$35.86.
DBS fell 19 cents to $18.12. CIMB Research has maintained its "hold" rating on the stock following its second-quarter results last week. The bank had posted a net profit of $969 million for the period, up 9 per cent year-on-year.
Technology firm Hi-P rose 1.5 cents to 69 cents after DMG & Partners Research analyst Edison Chen upgraded his call on the stock to "buy", citing its "magnificent turnaround".
He said the firm, which has been reducing its losses, is on track to recover further, thanks to its strategic partnership with Xiaomi - which makes some of the world's most popular smartphones - and its involvement in the production of Xiaomi's latest flagship product, the Mi4.
THE STRAITS TIMES