STI in the red over poor China data
SINGAPORE shares took another beating yesterday, along with other key regional markets after the latest sign of an economic slowdown in China unnerved investors.
The benchmark Straits Times Index (STI) fell for the second straight day, declining 22.73 points or 0.79 per cent to 2,845.74, just a hair above the 12-month low of 2,841.
The retreat here was part of a regionwide decline after flash data showed that China's manufacturing activity this month fell to the lowest level in over six years.
HSBC Global Research economist Julia Wang said: "The data highlights the considerable headwinds to growth from soft global demand. This will likely weigh on manufacturing sector output as well as investment (and) further adding to disinflationary pressures."
Investors, who are still cautious over the uncertainties around the timing of the United States Federal Reserve's interest rate hike, rushed for exits, pushing the region's biggest benchmark MSCI Asia ex-Japan down 2.3 per cent, the biggest daily fall in a month.
The move by the Asian Development Bank to lower its 2015 growth forecast for China to 6.8 per cent did not help, sending Wall Street down 1.09 per cent.
Taking the cue, Shanghai pared 2.19 per cent while Hong Kong lost 2.26 per cent yesterday. The euphoria in Kuala Lumpur over the recently announced market stimulus is also wearing off, sending shares down 1.36 per cent. Trading in Tokyo was closed for a public holiday.
The shorter trading week here due to today's holiday was also part of the reason why traders closed their positions, remisier Alvin Yong said, adding: "Local shares will remain range-bound between 2,800 and 3,000 in the near term.
"I'm not ruling out the possibility of the STI breaking below the 2,800 psychological level, but the Fed's decision to hold back on the rate hike will provide at least some breathing room."
Only six blue chip counters on the STI closed higher, with Singapore Airlines gaining the most, up 20 cents or 1.89 per cent up to $10.81. Another transport play, ComfortDelGro, rose three cents or 1.06 per cent to $2.87.
Outside the STI, Mainboard-listed Rowsley enjoyed a 1.3 cents or 8.78 per cent rise to 16.1 cents. Sentiment surrounding the real estate and architecture firm improved after it announced on Tuesday that it will convert its stagnant Iskandar project Vantage Bay into a healthcare city.
Noble Group was again the top losing blue chip, dropping 1.5 cents or 3.23 per cent to 45 cents.