Stocks slide further on back of Wall Street dip
LOCAL shares stayed in the red yesterday as Asian markets tracked a poor showing in the United States overnight.
The Straits Times Index (STI) fell 42.42 points, or 1.49 per cent, to 2,813.71, closing lower for the third consecutive day this week. Around two billion shares worth $1.32 billion were traded.
Wall Street slid 1.09 per cent on Tuesday, weighed down by a disappointing start to the corporate earnings season and renewed fears that the Federal Reserve will raise interest rates this year.
Tokyo led losses in the region, down 1.08 per cent as the yen strengthened. Hong Kong eased 0.6 per cent and Shanghai dipped 0.22 per cent.
"Stock markets are becoming nervous about the prospect of rising interest rates against a background of moderate profit growth and relatively high valuations," Ric Spooner, Sydney-based chief market analyst at CMC Markets Asia Pacific, told Bloomberg.
"Investors are also likely to be cautious ahead of the Fed minutes."
"Given how critical the interest rate outlook is for markets at the moment, markets will be focused on the degree of support for a rate hike this year" in the Fed minutes.
Minutes from the Fed's September meeting will be out at 2am Singapore time today with market consensus tipping a more "hawkish" tone in relation to the next rate hike.
At home, telco Singtel was a key drag on the STI, losing six cents or 1.5 per cent to $3.83.
Rig-builder Sembcorp Marine dropped four cents or 3 per cent to $1.30 in line with weaker oil prices. Keppel Corporation retreated six cents or 1.1 per cent to $5.35.
Outside the index, offshore services firm Mermaid Maritime sank 0.4 cent or 3.3 per cent to 11.6 cents after it said on Tuesday night that it has cut rates for two subsea and offshore services contracts in the Middle East to retain one deal and extend another.
The firm said the haircut on rates was "part of a cost reduction initiative" driven by the client, and estimated its portion of the revised contract value for the remainder of the term to be around US$70 million (S$97 million).
SingPost, which on Monday appointed three new non-executive independent directors and said it has implemented all recommendations made in a corporate governance review, shed one cent or 0.6 per cent to $1.53.
A CIMB report noted the group has take steps to improve its corporate governance, which could "ease some concerns", but added that its near-term earnings growth will remain a challenge.
It maintained a "hold" call on the stock.