STI slips on fears over China, Greece and US

GLOOMY OUTLOOK: Shanghai's port, seen from an office window. China announced on Sunday that its imports had slumped by 19.7 per cent last month, the largest drop in five years.


    Feb 10, 2015

    STI slips on fears over China, Greece and US

    STOCKS here fell yesterday after grim economic data from China, fresh fears over Greek debt woes and market worries over a potentially earlier United States interest rate hike.

    The benchmark Straits Times Index dropped 13.3 points or 0.4 per cent to 3,418.02.

    Sentiment was downbeat after China announced on Sunday that its imports had slumped by 19.7 per cent last month, the largest drop in five years.

    Slowing growth in the world's second largest economy caused by lower commodity prices and declining domestic demand cast a pall on exporters and companies with high exposure to China.

    Greece also weighed on markets after its newly elected Prime Minister Alexis Tsipras gave a defiant speech in Parliament on Sunday rejecting a current bailout proposal.

    The country could run out of money by the end of this month, leading to a default of its debt and even exit from the euro zone if no new deal is reached.

    An emergency meeting of the euro zone's finance ministers on the Greek situation will be held tomorrow.

    A better-than-expected jobs report out of the US on Friday raised the possibility of an earlier interest rate hike, with analysts worried that the expected timetable could be moved forward from the second half this year.

    Asian bourses had mixed performances, with Tokyo up by 0.4 per cent after the yen weakened against the US dollar on the strong jobs report.

    Shanghai also rose 0.6 per cent on hopes the Chinese government would do more to stimulate growth while Hong Kong dropped 0.6 per cent and Seoul lost 0.4 per cent.

    CMC Markets analyst Nicholas Teo noted that US bonds were sold down on Friday while US stocks sensitive to higher rates, such as real estate investment trusts (Reits) also saw weakness.

    "Singapore Reits, which trade closely to their US counterparts, may also be under pressure in early trading this week."

    Ascendas Reit declined five cents to $2.46, CapitaMall Trust dipped a cent to $2.18 and Mapletree Commercial Trust surrendered half a cent to $1.53.

    Among the biggest losers was Singapore Airlines, which declined 29 cents to $11.84 after it reported on Friday that third quarter operating profit dropped to $146.3 million from $151 million due to hedging losses.

    Rig builders Keppel Corp slid 25 cents to $8.68 while Sembcorp Marine lost four cents to $3.04, as both firmly denied allegations of bribery involving US$6 million (S$8.1 million) in kickbacks to officials of Brazilian national oil company Petrobas.

    Banks were by and large able to buck the trend, rising ahead of their earnings this week. DBS Group Holdings added seven cents to $19.45, OCBC rose five cents to $10.61, but United Overseas Bank lost a cent to $23.52.