Dec 06, 2013

    Investors on tenterhooks send STI down again

    NERVY investors waiting for key jobs data out of the United States today

    sent local shares into their third straight day of losses.

    The downbeat mood left the benchmark Straits Times Index (STI) down 36.32 points or 1.15 per cent to 3,124.38. It has now lost 52 points or 1.6 per cent this week.

    Other Asian bourses also saw red, with Japan's Nikkei 225 slipping 1.5 per cent, the ASX 200 in Australia off 1.4 per cent and the Hang Seng in Hong Kong losing 0.1 per cent.

    Wall Street provided little impetus for optimism, having fallen for the fourth consecutive day overnight on Wednesday.

    The US is set to release the monthly non-farm payrolls report today. Many expect to see improvement but that in turn is feared as it is seen as hastening the Federal Reserve's move to cut its stimulus.

    "Financial markets re-enacted the good-news-is-bad-news theme ahead of a possible tapering deadline," said CMC Markets analyst Desmond Chua.

    "Before Wednesday, chances that the Fed would begin tapering seemed remotely slim. But this has since inflated on the back of the better-than-expected trade, home and, more importantly, labour-market, data."

    ABN Amro expects the Fed to start tapering only in March, even if the job numbers are strong.

    "Broader evidence on the labour market and economy is probably not yet convincing enough for the [Fed] to feel confident as the strength of the labour market and general economy does not remain too convincing," it said in a recent report.

    Turnover here stayed thin, with about 1.93 billion shares worth $1.1 billion traded.

    Hutchison Port Holdings Trust led the losses, down 2.5 US cents or 3.7 per cent to 64.5 cents. Golden Agri-Resources fell 1.5 cents or 2.7 per cent to 55 cents and was actively traded with some 43 million shares worth $24 million done.

    CapitaMalls Asia lost five cents or 2.5 per cent to $1.925.

    The three counters combined shaved almost four points off the STI.

    Singapore Technologies Engineering fell eight cents or 2 per cent to $3.91.

    The three battered penny stocks suffered another painful day: Blumont Group slipped 0.7 cent or 9 per cent to 7.3 cents; Asiasons Capital fell 0.5 cent or 5 per cent to 10.6 cents; and LionGold lost 1.2 cents or 7.6 per cent to 14.6 cents.

    CIMB Research has set a target of 3,600 for the STI for the end of 2014, based on 14.4 times price earnings of the 2015 financial-year estimates.