STI falls again amid jitters over euro, oil
THE Singapore market took another dive yesterday after heavy falls on Wall Street and amid fresh concerns over the global economic outlook and plunging oil prices.
The benchmark Straits Times Index (STI) shed 46.33 points or 1.39 per cent to close at 3,281.95, dropping below the 3,300 level for the first time since Dec 20.
Overnight, the Dow Jones Industrial Index had sunk 1.86 per cent as United States investors reacted to a combination of worrying signs.
The euro dropped to its lowest level on Monday against the US dollar since 2006, ahead of the upcoming Greek election that could spell the country's exit from the euro zone.
Meanwhile, futures for Brent crude oil briefly touched US$52.66 - its lowest level since May 2009.
As oil prices continue their crash since mid-June last year, energy stocks suffered the most.
At home, Keppel Corp and Sembcorp Marine were the day's biggest losers. Keppel Corp slumped 37 cents or 4.26 per cent to $8.32, while Sembcorp Marine dropped 12 cents or 3.69 per cent to $3.13.
Other struggling oil and gas plays outside the STI also lost ground, including Ezion, which dropped one cent or 0.88 per cent to $1.13, and Swiber, which fell five cents or 17.54 per cent to close at 23.5 cents.
Banking stocks also came down partly due to profit-taking. DBS Group Holdings slid 21 cents or 1.05 per cent to close at $19.83, United Overseas Bank lost 64 cents or 2.67 per cent to $23.32, and OCBC closed at $10.16, down 19 cents or 1.84 per cent.
"Keppel Corp and the three banking stocks contributed to around half of yesterday's drop - although the sell-off of banks were likely just profit-taking, and their fundamentals remain positive ahead of a potential rate hike," Voyage Research analyst Phuah Keng Keat told The Straits Times.
Looking ahead, he is cautious about the STI's immediate outlook.
"The STI's drop yesterday reflected a selldown that started on Monday as negative news continues to pile up, with the Greek problem being one of the biggest concerns now," he said.
"I do not see a drop as severe as the plunge in last year's February and October, but volatility is certainly building up, and there's a chance that the STI may dip below its current 3,260 support level."
On the positive side of the ledger, Singapore Airlines gained nine cents or 0.78 per cent to close at $11.68. The carrier may see the market share of its group - including regional units Tigerair and SilkAir - grow as AirAsia struggles in the aftermath of Flight QZ8501's crash, UOB Kay Hian said in a report yesterday.
Meanwhile, most regional markets also lost ground with Tokyo slumping 3.02 per cent and Kuala Lumpur dropping 1.15 per cent.
Hong Kong also fell 1 per cent, while Shanghai bucked the trend, gaining 0.03 per cent as hopes for government stimulus measures remain. Still, sentiment cooled from Monday's 3.6 per cent jump - its best start to a year since 1993.