Asian markets continue to slide over US, China data, STI closes 42 points lower

People walking past a signboard displaying the closing numbers of the Hang Seng Index, which fell 2.78 per cent, on Jan 11, 2016.
People walking past a signboard displaying the closing numbers of the Hang Seng Index, which fell 2.78 per cent, on Jan 11, 2016. PHOTO: EPA

SINGAPORE - The grim start to 2016 just got a little worse as Asian markets continued their slide on Monday, when positive news from the United States job market and the stabilisation of the Chinese yuan failed to calm jittery nerves.

In China, the epicentre of the recent regional selloff, Shanghai fell 5.33 per cent and Shenzhen dropped 6.60 per cent, showing no sign of slowing their plunge. CSI 300, an index tracking the top stocks in both exchanges, has lost 14.4 per cent since the turn of the new year.

The bearish sentiment persisted even as the People's Bank of China kept the yuan stable after the currency hit a low against the greenback last week. Investors were also indifferent to the news over the weekend that the US created a respectable 292,000 jobs in December.

As a result, the regional markets remained in the red. Hong Kong was down 2.76 per cent, Sydney ended down 1.16 per cent, and Kuala Lumpur dropped 1.21 per cent. Tokyo was closed for holiday.

Singapore's benchmark Straits Times Index (STI) shed 42.38 points or 1.54 per cent to 2,708.85, a new low since June 2012 when the index dipped to 2,698.90. The days are looking similarly bleak, remisier Desmond Leong warned.

"It all depends on what happens in China but we are not seeing the data to expect the markets to bottom out yet. Keep in mind that the first leg of rebound from a crash is usually a technical rebound - and we haven't even had that first leg yet. Uncertainty is all I can say about the outlook," Mr Leong said.

On the STI, a total of 27 blue chips ended the day on a low note, with DBS paring 34 cents or 2.16 per cent to S$15.38. OCBC dropped 11 cents or 1.31 per cent to S$8.29, while United Overseas Bank closed down 14 cents or 0.76 per cent to S$18.76.

The usually preferred banking sector will be viewed with some caution as global economic uncertainties pile up. A slowing business loans growth and the potential deterioration of credit quality are questions hovering on investors' mind.

Keppel Corp extended its loss, losing 26 cents or 4.48 per cent to another low at S$5.54. Sembcorp Marine was down 5.5 cents or 3.37 per cent to S$1.575, while Ezra Holdings fell 0.7 cents or 7.61 per cent to 8.5 cents.

The offshore and marine sector is being hammered by rig order woes and weak energy prices. Ezra last week issued a year-on-year loss warning for its first quarter results, set to be announced this Thursday.

Noble Group remained in its downward spiral after news last week that it lost its investment grade rating with Standard & Poor's. On the other end of STI, only Golden Agri-Resources gained, rising 0.5 cents or 1.43 per cent to 35.5 cents, with 36.22 million shares transacted. There were more bright spots outside the STI. Tiger Airways put on 0.5 cents or 1.11 per cent to close at 45.5 cents, after Singapore Airlines announced that its 45-cent buy-out offer unconditional.

whwong@sph.com.sg