S'pore shares fall as investors lock in gains
LOCAL shares dipped yesterday as the temptation to cash in on Monday's gains proved too much for some investors.
The Straits Times Index fell 8.23 points or 0.25 per cent to 3,283.34, although it still retained most of its gain of 19.32 points from the previous day.
Regional markets were also mixed, after Monday's rise took them to their highest closing levels since June 2008.
The Nikkei 225 in Tokyo fell 0.42 per cent while Hong Kong's Hang Seng Index was flat.
Indonesian shares rose 0.72 per cent to add to Monday's solid gains as investors bet that the market-friendly candidate will prevail in today's presidential election.
"(Jakarta Governor Joko 'Jokowi' Widodo) has been the market favourite with his relatively more pro-business approach and humble roots.
"He has also gained a reputation for slashing through red tape and pushing through big projects during his time as Jakarta mayor," said Ryan Huang, market strategist at IG Singapore, in a note on Monday.
The optimism benefited auto company Jardine Cycle & Carriage, which rose 93 cents or 2 per cent to $46.45. It has a large exposure to Indonesia through its unit, Astra International.
Tat Hong Holdings was flat at 89.5 cents. The company, which rents and sells cranes, said on Monday that a unit is selling and leasing back five Australian properties. Another unit has signed a conditional agreement to sell its entire 70 per cent stake in Hup Hin Transport.
"We think these moves are part of Tat Hong's asset-light strategy and will allow the company to refocus in the face of a weaker Australian mining sector," said OCBC Investment Research.
"We maintain 'hold' with an 89-cent fair value estimate."
Developments in the United States will impact sentiment for the rest of this week.
The US earnings season was set to kick off after Asian markets closed yesterday with the results release of aluminium producer Alcoa.
"Investors will be monitoring how earnings perform in the second quarter," said CMC Markets analyst Desmond Chua.
They are also waiting for clearer guidance from the Federal Reserve minutes later today, "before committing further resources in an overstretched rally", he added.
Regardless of these events, some analysts expect market action in Singapore to continue to be muted. "We expect trading to continue to be range-bound this week, with lacklustre volumes, given that the World Cup is still ongoing and will continue to distract," said NetResearch Asia on Monday.
THE STRAITS TIMES