Oct 17, 2014

    STI sinks below this year's starting point

    IT TOOK just a few hours to wipe out what was left of the stock market's gains this year as investors bailed out on heightened concerns about the global economy.

    The Straits Times Index (STI) lost 44.51 points or 1.39 per cent to 3,154.21, dropping well below its 3,174.65 level at the start of the trading year on Jan 2.

    Amid the heavy selling, trading levels were stronger with 1.34 billion shares worth a total of $1.24 billion changing hands, higher than the year-to-date daily average of $1.03 billion.

    Shares opened in negative territory and the selling momentum only increased before the market ended at its lowest point all day.

    Poor retail sales in the United States sparked the sell-off overnight on Wall Street, where the Dow Jones Industrial Average ended down by 1.06 per cent.

    It set the tone for a grim session in Asia, where stock markets were badly stung.

    Tokyo declined 2.22 per cent, Hong Kong lost 1.03 per cent, Shanghai dropped 0.72 per cent and Seoul fell 0.37 per cent.

    Only Sydney escaped unscathed, ending 0.18 per cent in the black as investors picked up cheap stocks.

    Phillip Futures investment analyst Howie Lee advised clients to stay clear for now: "Hard to see the end of the tunnel in this rout. Stay cautious on catching the rebound until it is formed solidly, if there is a rebound.

    "You don't want to be caught out. Better to sacrifice a bit of gains than to endure huge losses. Not the time to try swing trading."

    Conglomerates and financial institutions that have been lending support to the STI this year gave way to steep declines.

    The Jardine group of companies were among the biggest losers. Jardine C&C fell 58 cents to $39.67, Jardine Matheson lost 44 US cents to US$57.50 (S$73.12) while Jardine Strategic was down 38 US cents to US$34.

    Continued low oil prices and a potential fall in demand for rigs plagued the offshore and marine plays. Keppel Corp lost 37 cents to $9.54, while SembCorp Marine dipped seven cents to $3.60.

    Great Eastern shed 48 cents to $23.51, DBS declined 29 cents to $17.75, UOB gave up 28 cents to $21.73 while OCBC surrendered 11 cents to $9.52.

    Among the top actives was commodities firm Noble, which lost four cents to end at $1.23 on a volume of 35.8 million shares.