Regional stocks dip ahead of earnings season
HAVING bounced 245 points in just eight trading sessions, the Straits Times Index (STI) dipped yesterday.
It dropped 47.23 points or 1.6 per cent to 2,984.88 in line with weakness in Hong Kong and the Dow futures.
Turnover dropped from $1.4 billion on Monday to 1.3 billion units worth $1.1 billion though the proportion contributed by trading in the 30 index members at 77 per cent was higher than Monday's 73 per cent.
The selling in Hong Kong that dragged the Hang Seng 0.6 per cent down came after the release of China trade data that was widely interpreted as being weak. The China Enterprises Index lost 1 per cent.
Chinese imports plunged 20 per cent last month, casting doubt on the strength of domestic demand in the economy, while oil fell more than 5 per cent overnight after a report that Opec continued to boost production.
Europe then opened in the red in the afternoon and at 5pm, the Dow futures had lost about 90 points, pointing to a weak Tuesday for Wall Street.
Among the top volume was STI component Genting Singapore, which slid $0.03 to $0.78 on volume of 31.3 million.
Deutsche Bank initiated coverage of Genting on Monday with a "sell" and target price of $0.50.
"We expect Singapore's 2015 gross gaming revenue to shrink 11 per cent to $6.7 billion, the second-lowest gross gaming revenue since its opening in 2010," said Deutsche Bank.
"Accordingly, we estimate Genting's financial year profit will fall by 50 per cent year on year and we see downside risk to consensus profit."
Elsewhere, most markets in South-east Asia gave up recent gains amid falls in regional currencies and as investors braced for a weak quarterly reporting season.
Indonesia's main stock index posted its biggest drop in more than seven weeks yesterday.
The Jakarta composite index shed 3.2 per cent, the biggest single-day percentage loss since Aug 24, erasing some of the 10 per cent gain over the past six sessions. Banks led among losers amid expectations of weak third-quarter results due from this week.
Malaysia's key index ended slightly higher after modest losses earlier and after a sixth straight gain on Monday. Indonesia and Malaysia both will be closed today for a market holiday.
The Indonesian rupiah and the Malaysian ringgit , commodity currencies in Asia, led losses in regional units after oil prices slumped.
Indexes in Thailand, the Philippines and Vietnam all snapped days of rising streaks which had been mainly driven by expectations of a United States Fed rate lift-off to early next year.
THE BUSINESS TIMES, REUTERS