Jakarta blasts, oil prices cast long shadow over regional bourses, STI down 51 points at close

Indonesian police ambulances carrying victims of a bombing driving past crowds in Jakarta on Jan 14, 2016.
Indonesian police ambulances carrying victims of a bombing driving past crowds in Jakarta on Jan 14, 2016.PHOTO: EPA

SINGAPORE - Asian markets slipped back into the red on Thursday alongside slumping oil prices, while bomb blasts in Jakarta further strained the already fragile sentiment.

The coordinated gun and bomb attacks in the Indonesian capital sent the Jakarta Composite Index down 1.4 per cent before the full-day drop shrank to 0.53 per cent, on the announcement of a 25 basis points interest rate cut.

The markets were already downbeat after the 2.21 per cent drop at Wall Street overnight, as crude oil benchmark Brent futures languished below US$31 per barrel.

Singapore's benchmark Straits Times Index fell under the pressure, dropping 51.93 points or 1.93 per cent to 2,644.57.

Elsewhere, Tokyo pared 2.68 per cent, Hong Kong lost 0.59 per cent and Sydney was down 1.54 per cent. Shanghai rose 1.97 per cent, reversing its loss in the morning session, but the yuan weakened to remind investors of the bumpy road ahead.

"Between the lingering concerns over China, the selloff in the United States and the weak energy prices, regional markets simply cannot catch a break," remisier Alvin Yong said.

"For STI, we are looking at a support level of 2,600 within this month. Central bank policies - such as further easing in Japan, and a limited US rate hike - can catalyse a recovery, but in the short term the market view is very bearish."

On the STI, 26 blue chip counters were down after another torrid day, and the offshore and marine related plays were belted heavily.

In what is becoming an alarming slide, both Keppel Corp and Sembcorp Marine suffered big drops yesterday. Keppel Corp closed down 33 cents or 6.36 per cent to S$4.86, and SembMarine dropped 10 cents or 6.80 per cent to S$1.37.

"With the sector in such a bad shape, consolidation is bound to happen. The market has heard rumours that Keppel may be planning to acquire SembMarine, which is not unlikely considering Keppel's previous acquisitions to boost market share," Mr Yong noted, referring to Keppel's move to buy out the then listed Far East Levingston Shipbuilding in the 1970s.

Other rumours have also emerged amid the market volatility. A trader speaking on anonymity told the Straits Times that CapitaLand may be considering a bid for China-focused developer Yanlord Land Group.

CapitaLand dropped three cents or 0.96 per cent to S$3.09, and Yanlord shed 0.5 cents or 0.52 per cent to 96.5 cents.

All three banks were down, with DBS dropping 45 cents or 2.94 per cent to S$14.84, while OCBC closed down 21 cents or 2.55 per cent to S$8.03 and United Overseas Bank slipped 21 cents or 1.16 per cent to S$17.83.

Outside the STI, China Sports International was one of the top active counters, rising 0.2 cents or 9.52 per cent to 2.3 cents. Around 63 million shares were transacted. This followed the two rounds of share acquisitions by OSIM this week that amounted to around S$1.7 million.

whwong@sph.com.sg