STI declines despite rally in oil prices
LOCAL shares slipped yesterday on concerns over global economic growth, although a rally in crude oil prices helped cushion the drop.
A move by Australia's central bank to cut interest rates to a record low also put a dampener on some markets in the region.
The benchmark Straits Times Index fell 15.33 points or 0.5 per cent to 3,408.02, led by declines in banks and Singtel as traders took profit and moved into beaten-down sectors like property.
Elsewhere in the region, stocks in Sydney rose 1.5 per cent due to the interest rate cut by the Reserve Bank of Australia.
The move by Australia's central bank lifted the Japanese yen, said Tomoichiro Kubota, a senior market analyst at Matsui Securities in Tokyo, according to a Bloomberg report.
A stronger yen will hurt Japanese exporters. Tokyo's Nikkei index fell 1.3 per cent yesterday.
Stocks in China rose, however, since traders widely expect the country to embark on its own monetary easing following the recent release of poor economic data.
Hong Kong's Hang Seng Index gained 0.3 per cent and Shanghai jumped 2.5 per cent. Seoul was flat.
"There's speculation about a reserve-requirement ratio cut," said Wu Kan, a fund manager at Dragon Life in Shanghai, according to the Bloomberg report. "Though it's not confirmed, the speculation is driving the market to some extent."
Singapore's index slipped as traders rotated their capital from outperformers such as banks to underperformers.
UOB, for instance, erased all the gains it had made on Monday in its 34-cent drop to $23.16, while DBS fell 18 cents to $19.54. OCBC, however, inched up a cent to $10.52.
The winners yesterday were largely from sectors such as offshore and marine, and property, which had suffered from poor market conditions.
Rigbuilder Keppel Corp climbed 13 cents to $8.85 and Sembcorp Marine rose four cents to $3.10. This was probably aided by a rally in oil - prices of benchmark Brent crude traded in London jumped by about 3 per cent to nearly US$57 per barrel yesterday.
Other gainers included ComfortDelGro, which hit an all-time high with an increase of six cents to $3.02. The company, which is the largest taxi operator here, is expected to raise taxi fares soon.
CapitaLand went up two cents to $3.54 and City Developments increased by four cents to end the day at $10.16.