Asian shares down for second day over global growth worries, STI ends 40 points down

The Straits Times Index fell by 1.53 per cent to 2,542.66 on Feb 11, 2016.
The Straits Times Index fell by 1.53 per cent to 2,542.66 on Feb 11, 2016. PHOTO: ST FILE

SINGAPORE - Most Asian equities were again knocked back Thursday by a fresh sell-off led by Hong Kong, as worries over the global economy continued to bite.

Singapore's Straits Times Index was little spared as it slid 39.44 points, or 1.53 per cent, to 2,542.66, logging its second day of decline.

The region-wide weakness follows closely behind the United States Federal Reserve chair Janet Yellen's acknowledgement that tightening financial conditions and uncertainty about China posed risks.

She also said she does not expect the central bank to reverse its interest rate hike programme in response to the recent turmoil across financial markets, although it may be delayed.

That crude oil prices fell down below US$27 a barrel - although it has rebounded slightly since - was a drag on sentiment as well.

Wall Street dipped 0.6 per cent, extending its losses since Feb 4.

In Asia, Hong Kong came off the hardest hit, slumping 3.9 per cent as traders returned from a three-day Chinese New Year holiday to the worldwide rout amid lingering concerns over the riots in the city earlier in the week, while Seoul sank 2.9 per cent.

"We're seeing a contagion from what's been going on in the last three days in global markets," Mr Tim Condon, head of Asian research at ING Groep NV in Singapore, told Bloomberg. "This is the first day South Korea and Hong Kong are registering a sort of reaction to that. It's a huge down day. Financial markets are repricing for a global growth slowdown. Expectations that monetary policy would be able to do much have diminished considerably."

Sydney, however, rose 1 per cent, while Jakarta climbed 0.9 per cent.

Tokyo, Shanghai and Taipei were closed for public holidays.

The losses yesterday were led largely by telco SingTel, which dropped 12 cents or 3.3 per cent to S$3.54 on a heavy volume of 42.2 million units, ahead of the release of its third-quarter results on Friday.

An OCBC Investment Research report said it expects the group to draw a revenue of about S$4.4 billion - supported by still-strong handset sales, though potentially mitigated by the weaker Australian dollar against the Singapore dollar - and an underlying net profit of S$945 million.

Local lenders continued to fared poorly: DBS Group Holdings fell 24 cents or 1.8 per cent to $13.14, OCBC Bank lost 11 cents or 1.5 per cent to $7.45, while UOB pared six cents or 0.3 per cent to $17.50.

Commodity plays came under pressure as well, with Noble Group slumping two cents or 6.2 per cent to 30.5 cents. Golden Agri-Resources logged a steep 1.5 cent or 4 per cent fall to 36 cents, while Wilmar International slipped two cents or 0.7 per cent to S$2.95.

Across the bourse, a total of 816.9 million shares worth S$1.05 billion changed hands.

tsjwoo@sph.com.sg