Singapore shares sank yesterday as a worse-than-expected export performance by China gave traders the excuse to book their profits.
China's exports last month posted their biggest drop in more than five years, reinforcing fears that the world's second-largest economy is slowing. Imports for the month also slowed, signalling more difficulties ahead for its trading partners.
The Straits Times Index (STI) slid 1.58 per cent, or 44.74 points, on the news to hit 2,778.77. Profit-taking on blue-chip constituent Keppel Corp, which fell nearly 7 per cent, or 43 cents, to $5.77, did the most damage.
Other blue chips also took a hit. DBS Group lost 1.7 per cent, or 26 cents, to $15.12; OCBC Bank dipped 0.9 per cent, or eight cents, to $8.64; Sembcorp Industries plunged 9.1 per cent, or 29 cents, to $2.90; United Overseas Bank slipped 1.1 per cent, or 21 cents, to $18.17; and Singtel dropped 0.8 per cent, or three cents, to $3.72.
Market participants are looking ahead to the European Central Bank's meeting tomorrow, with expectations for further cuts to its already-negative deposit rates and more quantitative easing beyond its proposed end in March 2017.
"The market needs more good news for the rally to sustain. But now that we have broken support at 2,800, the next support level will be 2,730," said remisier Alvin Yong.
Oil and gas plays continued to hog the most actively traded list.
Ezra Holdings fell 2.9 per cent, or 0.3 cent, to 10 cents with 617.5 million shares traded. Nam Cheong fell 4.4 per cent, or 0.5 cent, to 10.8 cents on trade of 85.4 million. Magnus Energy was flat at 0.4 cent with 114.6 million shares changing hands.
Commodities trader Noble Group was flat at 45 cents with 127.8 million shares traded.
Interra Resources continued to rebound for a second session despite being queried by the Singapore Exchange over unusual volume movements on Monday. The petroleum exploration and production company rose 17.2 per cent, or 1.5 cents, to 10.2 cents, with 57.1 million shares traded.
Osim International, which resumed trading yesterday, rose 12 per cent, or 15 cents, to $1.375. DBS Group Research, which downgraded its call to "hold" from "buy", said several large shareholders, mainly institutional funds, can collectively hold out to get a higher price.
"Although we are now less pessimistic on earnings visibility, the sales decline has been less severe in the fourth quarter, but it is still shrinking in absolute terms. More than 50 per cent of Osim's sales are from massage products and these could likely be the drag on sales growth," it added.
RHB Research yesterday said that recent risk appetite for Singapore stocks "appears to have improved, spurred by the optimism of further easing in China and a strengthening Singdollar, while oil prices (appear) to stabilise, helping to generate trading opportunities".
