SINGAPORE - Local stocks opened on Monday (Aug 24) to another bout of selling as as nervous investors rushed for the exit after the free fall in the Chinese markets again spooked sentiments in the region.
The benchmark Straits Times Index (STI) was trading down 3.26 per cent at 2,874.23 as at 12.15pm, a low not seen since June 2012.
Remisiers pointed to a spreading panic on the trading floor.
Mr Desmond Leong said: "The market is in a very weak shape now, and everybody is telling me to either sell or reduce position. The sell-off is broad, with both blue chips and pennies being hit.
He added: "Investors are scared of what's happening in China now with Shanghai stocks falling the cliff today, but there are also the uncertainties in the United States and Greece. It's a global issue."
Shanghai Composite had lost over 8 per cent by 11.30am on Monday, despite the move by the Chinese government over the weekend to formalise rules allowing pension funds to invest in the stock market.
The market rout in China is being exacerbated by deepening worries that its economy is stuck in a bigger than expected slowdown - but that is not the only thing on the mind of Singapore investors, Mr Alvin Yong said.
"The slowdown is not just in China. The whole South-east Asia, including Singapore, is being hit by slower growth and weak outlook. So it's no wonder the sentiments are so weak right now. Some may be planning to bargain hunt, but most are looking to get out and to wait and see.
"I think some investors are also disappointed by the fact that the Prime Minister did not announce any pro-business moves, such as the unwinding of cooling measures, at the National Day Rally on Sunday," Mr Yong said.
He added that the selldown on Monday had hit a wide range of counters, with even defensive plays such as banking being affected.
DBS fell the most among the three local banks, paring 3 per cent by 11.30 am. United Overseas Bank dropped 1.8 per cent, while OCBC lost 2.9 per cent - both hitting respective full year lows.
Investors were also selling down CapitaLand, which had dropped 4.6 per cent by 11.30am. Its substantial earnings and asset exposure to China is sparking fears that the property heavyweight will be severely affected by the recent devaluation of the Chinese yuan.