Poor start for Singapore shares in 2015's first full week of trade

A man walks past a stock market board. Singapore shares retreated on Monday as oil prices continued to plunge on fears of falling demand in the midst of oversupply, marking a poor start to 2015's first full week of trading. -- PHOTO: ST FILE
A man walks past a stock market board. Singapore shares retreated on Monday as oil prices continued to plunge on fears of falling demand in the midst of oversupply, marking a poor start to 2015's first full week of trading. -- PHOTO: ST FILE

SINGAPORE - Singapore shares retreated on Monday as oil prices continued to plunge on fears of falling demand in the midst of oversupply, marking a poor start to 2015's first full week of trading.

Analysts said that the drop was likely due to profit-taking after the local market's recent rally, adding that all eyes will now be on the release of jobs data for the United States on Friday.

The benchmark Straits Times Index (STI) lost 33.56 points, or 1 per cent, to trade at 3,337.03 by around 11.45am on Monday.

"The STI closed near its recent peak of 3,388 last Friday and was one of the few indices that recorded gains in the past week," said Phillip Futures analyst Howie Lee. "This puts the STI at a toppish height and leaves the index with more room for downside than registering a rally."

"Ahead of the crucial US nonfarm payrolls numbers this Friday, investors have chosen to be cautious by choosing to take profit from the STI's lofty height before the event."

It was the worst showing out of the major markets in Asia. Hong Kong was 0.1 per cent lower, Tokyo shed 0.7 per cent and Seoul lost 0.7 per cent.

Shanghai was up 2.4 per cent by 11.45am, extending gains for the world's best-performing stock market last year, which rallied on speculation the government will ease monetary policies to boost growth. On Monday, transport companies and property developers surged after Beiing scrapped price controls on bulk cargo and packages and said it would raise the cap on housing-fund loans for first-time home buyers.

The decline in the Singapore market was led by banks and happened after crude oil prices fell further to reach their lowest levels in more than five 1/2 years after lacklustre factory data from the United States on Friday fuelled worries about the state of the global economy and the strength of oil demand.

The prices of benchmark Brent crude oil traded in London fell to slightly above US$55 on Monday morning Singapore time, owing to signs of further weakening in the euro zone.

UOB lost 49 cents to $24.02, DBS shed 43 cents to $20.07 and OCBC slipped 17 cents to $10.33 by around 11.45am on Monday.