Sep 23, 2015

    STI slips on mixed signals from China, US markets


    THE Straits Times Index's (STI's) movements yesterday were dictated first by the performance of the China and Hong Kong markets, and later by a sharp dip in the Dow futures and a weak opening for Europe.

    The eventual loss of 13.8 points that the STI suffered at 2,868.47 after an earlier gain of 20 points suggested a slide on Wall Street yesterday - or perhaps a resumption of the short selling after Monday's short-covering.

    Turnover, however, was a mediocre 1.5 billion units worth $1.05 billion and, excluding warrants, the whole market's advance-decline score of 192-212 suggested most players were still cautious about the outlook for equities.

    Overall, the session did not raise too many eyebrows - at the start of the week, expectations were that daily trading would be volatile with no clear direction.

    There was also no particular pattern to the selling here. All three bank stocks were firm in the morning and early afternoon but had their gains erased in the final two hours. OCBC Bank, for example, first touched $9.13 but ended at $9.08 for a gain of 7 cents that came with 6.8 million done.

    Elsewhere, comments from top Federal Reserve officials suggesting that a United States interest rate rise is still likely this year pushed the US dollar and some Asian stocks higher, as the Fed sought to ease concern about the state of the global economy.

    Another rally in Shanghai also bolstered confidence, with the index seeing a third straight day of gains. But the Asian Development Bank flagged concerns about China's growth, saying it would act as a drag on regional expansion this year.

    World markets had tumbled on uncertainty about the global outlook after the US central bank on Thursday delayed announcing a rise, with its head Janet Yellen citing the threats caused by China's faltering economy as a key reason.

    South Korea's won slipped 0.38 per cent, the Thai baht eased 0.2 per cent, the Taiwan dollar retreated 0.47 per cent and the Malaysian ringgit was 0.15 per cent lower.

    The euro weakened against the dollar and yen as the European Central Bank contemplates widening its stimulus programme to try to boost the euro-zone economy.

    Sydney stocks ended 0.74 per cent higher and Seoul closed up 0.88 per cent. Hong Kong added 0.18 per cent by the close.

    Shanghai finished up 0.92 per cent, with dealers in an upbeat mood as Chinese President Xi Jinping prepares to start a state visit to the US - amid hopes that he will sign several trade agreements.