Sep 14, 2016

    Singapore not spared from jitters before Fed meet

    THE local stock market was hammered by its worst sell-off in recent weeks with analysts expecting more volatility ahead of a Federal Reserve meeting next week.

    The Straits Times Index (STI) slumped 54.95 points or 1.91 per cent - its steepest one-day fall since a 2.09 per cent drop on June 24 - to 2,818.38, on $1.31 billion of shares traded across the whole market.

    Singapore was the worst performer in the Asia Pacific, as Hong Kong slid 0.32 per cent and Kuala Lumpur pared 0.55 per cent. Shanghai added 0.05 per cent and Tokyo put on 0.34 per cent.

    KGI Fraser Securities trading strategist Nicholas Teo said the fall here was not particularly surprising given the local market was closed for a holiday on Monday when a regional sell-off was just as severe.

    "The Hang Seng, for instance, lost 3.36 per cent on Monday so we're seeing a delayed response here to the Fed rate fears that had rocked other markets," he added.

    The bearish mood gripped Wall Street last Friday, when the Dow Jones Industrial Average closed down 2.13 per cent, also its worst day since June 24.

    But overnight it bounced back 1.32 per cent, partly due to Fed official Lael Brainard's dovish view on whether to hike United States interest rates at its Sept 20-21 meeting.

    Only two of the 30 STI stocks rose, with Sats rising four cents or 0.84 per cent to $4.81. United Overseas Bank added nine cents or 0.48 per cent to $18.82.

    Among the 26 blue chips that fell, Sembcorp Marine slid the most - 10 cents or 7.22 per cent to $1.285 on 10.8 million shares done. Keppel Corp shed 20 cents or 3.69 per cent to $5.22 and Genting Singapore slid three cents or 3.95 per cent to 73 cents on 18.1 million shares done.

    The outlook for oil prices - the decisive factor in the grim showing by offshore and marine stocks - remains gloomy, as the International Energy Agency's forecast yesterday noted that global oil demand is slowing faster than expected.

    In response, Ezra Holdings plunged half a cent or 9.09 per cent to five cents on 95.9 million shares traded - one of the day's top actives - and Ezion Holdings dived two cents or 6.90 per cent to 27 cents.

    City Developments shed 27 cents or 2.96 per cent to $8.85 and CapitaLand dropped six cents or 1.89 per cent to $3.12. Ascendas Real Estate Investment Trust pared five cents or 2.02 per cent to $2.43 and CapitaLand Commercial Trust shed 3.5 cents or 2.17 per cent to $1.58.