STI falls amid global market mayhem

ANXIOUS TIMES: Japan's Nikkei 225 tumbled 4.2 per cent yesterday as investors shunned risk assets amid concern about the global economic outlook. In comparison, the STI got off fairly lightly with a loss of 0.84 per cent. PHOTO: BLOOMBERG


    Feb 05, 2014

    STI falls amid global market mayhem

    AS MORE weak data exacerbated the fears already troubling investors, the local bourse had only one way to go yesterday - down.

    And lose ground it did - for the fourth straight day, as the Straits Times Index (STI) fell 25.15 points, or 0.84 per cent, to 2,965.80.

    But the STI got off fairly lightly. Japan's Nikkei 225 tumbled 4.2 per cent, while Hong Kong's Hang Seng slipped 2.9 per cent on its reopening after the Chinese New Year holiday.

    The local bourse, like global markets, has already been wobbly owing to United States Fed tapering nerves, currency volatility in emerging markets and a string of weak Chinese macro data.

    Recent disappointing US manufacturing data added to the jitters and fuelled concerns that the US recovery is shakier than most had hoped.

    US stocks slumped overnight on Monday, with the Dow Jones Industrial Average and S&P 500 losing over 2 per cent.

    However, there was one bright spot - the euro region bucked the trend of major economies and showed an uptick in manufacturing activity. Still, this proved inadequate to soothe nervous investors.

    As the Singapore bourse is one of the higher-yielding markets in the region, UBS Wealth Management regional chief investment officer Kelvin Tay expects it to be more vulnerable to rising government bond yields as a result of the Fed's tapering.

    Given this and broad macro-economic challenges, Mr Tay sees "no discernible catalyst" for the local bourse any time soon.

    About 1.96 billion shares worth $1.19 billion were traded in the local stock market.

    SIA Engineering led the losses, falling 10 cents, or 2 per cent, to $4.81. The company reported a 9.7 per cent drop in quarterly net profit from a year ago, owing to rising costs and a smaller currency-exchange gain.

    Thai Beverage slipped one cent, or nearly 2 per cent, to 53 cents, while Noble Group fell 1.5 cents, or 1.6 per cent, to 93.5 cents.

    DBS Group Holdings slipped 24 cents, or 1.5 per cent, to $16.30, while United Overseas Bank lost 28 cents, or 1.4 per cent, to $19.50. OCBC fell eight cents, or 0.9 per cent, to $9.09.

    Penny stocks hogged the most active list, with Albedo the leader on 319 million shares traded. The counter rose 0.5 cent, or 9 per cent, to 6.2 cents.

    Rex International Holding also bucked the general market's downward trend, gaining five cents, or 8.3 per cent, to 65 cents on news that its indirectly owned subsidiary has discovered evidence of oil in a well in Oman.