Jul 10, 2014

    STI down as Wall Street slips

    SINGAPORE shares endured a listless session yesterday, as bleary-eyed traders recovered from the shock of seeing hosts Brazil humbled by Germany in the World Cup semi-final.

    Traders paying some attention to the markets and not post-mortems of Brazil's dramatic exit may have factored in an overnight dip on Wall Street. The Straits Times Index ended 7.88 points, or 0.24 per cent, lower at 3,275.46.

    Volumes were relatively muted, with just 2.6 billion shares worth $1 billion changing hands.

    Dealers said trading was slowest among the blue chips. In contrast, certain penny stocks saw some interest.

    A broker said yesterday: "There was little attention paid to the market today as many investors had stayed up to watch the early-morning World Cup match."

    Overnight, Wall Street slipped after setting a fresh milestone last Thursday.

    The Dow Jones Industrial Average dipped 0.7 per cent as technology and consumer stocks headed south, with well-known counters such as Facebook and Twitter losing ground.

    "Questions over valuations may be re-emerging. However, take away the harsh winter in the first quarter and we may see a better United States earnings season in the second quarter to justify current higher valuations," said CMC Markets analyst Desmond Chua.

    The lacklustre display by US stocks overnight set the scene for a sluggish day in the region, with Hong Kong down 1.6 per cent, Japan 0.1 per cent behind and Shanghai 1.2 per cent lower.

    Here, 16 of the 30 STI component counters closed in negative territory, with seven gainers and the same number unchanged.

    Commodity-related plays closed lower, with Olam International shedding seven cents to $2.43 and Noble Group 2.5 cents down to $1.375.

    All three bank stocks ended lower, with DBS Group Holdings sliding six cents to $17.01, United Overseas Bank 30 cents down at $23.20 and OCBC Bank a cent back at $9.44.

    It was also a downbeat day for liftboat maker Ezion Holdings, after Credit Suisse initiated coverage with an "underperform" call and a $1.80 target price. Ezion slipped seven cents to $2.

    Credit Suisse noted: "While Ezion has typically been seen as a play on the underpenetrated liftboat market, we believe the market is underestimating the risks of a shift in its portfolio towards service rigs."

    The day's most active stock was SIIC Environment, which tumbled 10 per cent to 15.4 cents with 1.2 billion shares done after announcing a placement to raise net proceeds of $154.8 million.

    DMG noted: "M&As will continue to be SIIC Environment's key growth strategy, going forward."