Asian markets retreat over China data, flagging commodity prices, STI closes 25 points down

A 6.8 per cent year-on-year drop in China's November exports has seen Asian markets take a hit, on Dec 8, 2015.
A 6.8 per cent year-on-year drop in China's November exports has seen Asian markets take a hit, on Dec 8, 2015.PHOTO: REUTERS

SINGAPORE - Asian markets were back in choppy waters after a bright start to the week, as investors rushed for exit on concerns over the flagging commodity prices and thorny issues in China.

A string of bad news emerged on Tuesday (Dec 8) to rock the already wobbly sentiment in this region, with China reporting a 6.8 per cent year-on-year drop in November exports - a fifth straight month of decline.

The data followed the global crude benchmark Brent futures dipped 5.4 per cent overnight to US$40.66 per barrel, as punters reacted to fears of a supply glut after the Organisation of the Petroleum Exporting Countries could not agree on lowering production in its meeting last week.

As a result, all key regional markets were down, pushing the MSCI Asia ex-Japan index 1.5 per cent lower to wipe off its gains this month.

Shanghai pared 1.89 per cent and Hong Kong dropped 1.34 per cent, while Tokyo was down 1.04 per cent. Kuala Lumpur ended 0.16 per cent lower, and Sydney lost 0.92 per cent.

Singapore's benchmark Straits Times Index was not invulnerable, dropping 24.89 points or 0.86 per cent to 2,876.03, after the 0.76 per cent gain on Monday.

Investors in Asia will like remain jittery towards the year-end amid the myriad of issues, Bank of Singapore chief economist Richard Jerram told The Straits Times.

"The dropping oil prices are triggering concerns of another bout of weakness in Asia's emerging markets and their currencies, and that's the main reason behind the regional drop.

"But another thing that's starting to bother the markets is that China seems to start allowing the yuan slide to resume, partly to regain the currency's trade competitiveness. Whether there will be further impact on regional currencies is another cause for worry."

Reflecting that move, the United States dollar rose to a new full-year high at 6.415 against the yuan on Tuesday.

In Singapore, that sell-off pushed as many as 25 counters on the STI lower, with Sembcorp Industries dropping 12 cents or 3.81 per cent to S$3.03 - the top losing blue chip.

The drop came despite the news on Monday that the company had secured a US$300-million power plant deal in Myanmar, and investors were likely still mindful over the contract woes faced by its rig-making unit Sembcorp Marine, which pared 6 cents or 3.19 per cent to S$1.82.

On the other end of the ledger, only three blue chip counters ended the session higher. Singapore Airlines was up 41 cents or 3.88 per cent to S$10.98, Thai Beverage put on 1.5 cents or 2.21 per cent to close at 69.5 cents, and Ascendas Real Estate Investment Trust gained 3 cents or 1.28 per cent to S$2.38.

Outside the STI, Neptune Orient Lines dropped 0.5 cents or 0.41 per cent to S$1.22, a day after it received a cash offer of S$1.3 per share as CMA CGM moved to acquire the Singapore shipping firm.

whwong@sph.com.sg