Monday blues for STI amid US, Greece fears
A BEARISH mood continues to loom over the local market, with sentiment hit by the lack of positive news at home and concerns over the wider global economy.
The downbeat mood left the benchmark Straits Times Index (STI) down 13.34 points or 0.4 per cent at 3,320.33, a dismal start to the week after the 1.7 per cent drop last week.
Yesterday's decline was not surprising, as market watchers were expecting a hit following the improved United States job data that came out on Friday.
The cheers over economic recovery were drowned out by fears on Wall Street that the better outlook would soon mean higher interest rates.
These interest rate concerns, along with fears over the Greek debt crisis, are part of a new norm that is keeping the local market in a state of sluggishness, remisier Desmond Leong said.
"The latest decline was much of the same that we've seen since mid-April, and I really don't see any positive catalysts...
"But, at the same time, markets have had these issues in view for a while. Barring new incidents - such as the actual Grexit - I believe the current decline is only short to mid term. Last August, we also had an extended correction that was followed by new highs. The current correction will also likely lead to a rebound."
The top blue chip was City Developments, which closed 13 cents or 1.33 per cent up at $9.90.
The developer was given a "buy" rating by Maybank Kim Eng last week, which noted that developer stocks have outperformed real-estate investment trusts (Reits) by 11.6 per cent this year.
StarHub closed up one cent or 0.25 per cent at $4.03, while ComfortDelGro ended two cents or 0.65 per cent higher at $3.08.
At the other end of the ledger, Ascendas Reit was the worst-performing blue chip, closing seven cents or 2.83 per cent down at $2.40.
Factory and warehouse vacancies may edge up towards the end of the year and put pressure on industrial Reit performance, Maybank Kim Eng noted.
Sembcorp Marine closed six cents or 2.06 per cent down at $2.85, while Keppel Corp fell seven cents or 0.82 per cent to $8.48.
Most oil and gas plays took a beating yesterday after the Organisation of the Petroleum Exporting Countries said on Friday that it would not cut output.
"We have hold ratings on Keppel Corp and Sembcorp Marine, while our rating for Ezion Holdings is a buy with a $1.55 fair value estimate," OCBC Investment Research analyst Low Pei Han told The Straits Times.