Dec 28, 2015

    Post-Xmas gloom over China data

    REGIONAL markets look set for a quiet, more sober week after last week logging one of their best showings this year, albeit on thin trading.

    A slight recovery in oil prices off historic lows and holiday cheer helped with the pre-Christmas lift.

    But the latest grim data from mainland China yesterday will set a more sombre tone, after industrial profits slid 1.4 per cent this month, the sixth straight month of decline.

    Last week, Singapore's benchmark Straits Times Index fared well, rising 13.97 points, or 0.49 per cent, to 2,877.62 on Thursday in a half-day's trade, contributing to a 0.87 per cent gain for the week.

    Some notable movements in the market - which reopens today, after being shut on Friday for the Christmas holiday - included that of postal and e-commerce group Singapore Post, which tumbled five cents or 3 per cent to $1.61, its lowest since June last year.

    This was after concerns were raised over a special corporate governance audit it will be undertaking.

    Commodity giant Noble Group dropped half a cent or 1.1 per cent to 45.5 cents, reversing its earlier gains. The firm last week sold its remaining 49 per cent in its agriculture unit to China's Cofco Corp for at least US$750 million (S$1.05 billion).

    Elsewhere in the region, Hong Kong gained 0.7 per cent on Thursday in shortened trade, while Sydney jumped 1.3 per cent.

    Shanghai, which was open on Christmas, added 0.4 per cent amid speculation that the government will step up in its efforts to further stem an economic slowdown.

    But Tokyo ended lower for the fifth straight week, led by exporters as it slid 0.4 per cent.

    Over in the United States, Wall Street retreated 0.3 per cent on Thursday, dragged down by a drop in energy stocks.

    Still, the Dow Jones Industrial Index put on about 2.5 per cent for the shortened week, buoyed by a rebound in crude prices which earlier hit 11-year lows - posting its best weekly performance since Nov 20.

    The Standard & Poor's 500 Index rose 2.8 per cent, recouping most of its losses since the Federal Reserve on Dec 16 raised interest rates for the first time in almost a decade.

    "We've seen some increases in the price of oil so people are maybe a little more interested in putting money to work at these prices," Mariann Montagne, who helps oversee $870 million as senior investment analyst at Gradient Investments Group, told Bloomberg.

    "The Fed hike really told us that things are improving and that the economy can support a rate hike."

    Analysts said the week ahead could be yet another quiet one as markets prepare to usher in the New Year.

    Traders are likely looking forward to making a fresh start after the tough year. "The consensus is that the Fed is going to raise rates pretty slowly and that the economy will be able to absorb those rate hikes," Giri Cherukuri, head trader at OakBrook Investments, which oversees US$1.3 billion in Illinois, said in a Reuters report. "So the first thing next year will be to track the path of that economic growth."