SINGAPORE - Local shares slid for the third day this week to mark a grim start to 2016, even as the Chinese markets stabilised on news that the government move to curb volatility will become long-term measures.
The China Securities Regulatory Commission announced on Wednesday through state-run media that the current ban on major shareholders to dump stocks will remain in place until new rules on this front are drawn up.
This pushed China's benchmark Shanghai Composite up 2.25 per cent, after the 7.1 per cent plunge earlier this week.
But the rest of the regional markets were less buoyant. Hong Kong was down by 0.98 per cent and Tokyo pared 0.99 per cent. Seoul lost 0.26 per cent, showing limited impact from North Korea's surprise announcement of a successful hydrogen bomb test.
In Singapore, the benchmark Straits Times Index closed down 29.96 points or 1.06 per cent to 2,804.27, testing the 2,800 level that the STI had held through 2015. Whether the line will hold depends on what news the latest Federal Reserve meeting minutes would bear, remisier Alvin Yong noted. The minutes were released early this morning
"If the message is dovish - for instance, suggesting that the further rounds of rate hike will be gradual this year - then we may see the Dow recovering to give the local market some uplift," he said. Dow Jones Industrial Average closed flat overnight with a 0.06 per cent gain.
"Regardless, the overall market will remain weak as investors head into the uncertain earnings seasons. The weak oil prices, which I don't expect any meaningful rebound for, also remain a concern."
Brent futures have dropped further from the US$37 level on Monday to US$35.25, a new 12-month low, as Saudi Arabia reduced its European export prices in an apparent bid to undercut rival supplier Iran amid a festering religious tension between the two countries.
Unsurprisingly, offshore marine plays Sembcorp Marine and Keppel Corp were among the top losing blue chips. SembMarine dropped six cents or 3.51 per cent to its 12-month low at S$1.65, and Keppel Corp shed 22 cents or 3.41 per cent to close at S$6.23.
Commodity firm Noble Group was also down, losing 1.5 cents or 3.8 per cent to close at 38 Singapore cents - another full-year low recorded yesterday.
On the other end of STI, only six counters ended on a positive note, led by Sats which rose five cents or 1.3 per cent to S$3.89. The flight service provider has been one of 2015's standouts, gaining 30 per cent in the past 12 months despite the persistent market headwinds.
