Regional bourses end week on a low, STI closes 14 points down

SINGAPORE - Asia stocks took another beating on Friday following a further drop in oil prices, while the sell-off in China intensified as investors were rattled by downbeat economic data.

Shanghai led the regional plunge with a 3.55 per cent drop, hitting its lowest since December 2014 and down 9 per cent for the week.

Chinese investors rushed for the exits after the bank loan data for last month came in lower than expected. Further economic data will be available on Tuesday when fourth-quarter growth figures are announced, but market confidence is clearly in tatters.

As a result, Hong Kong was down 1.5 per cent, Tokyo dropped 0.54 per cent and Sydney closed down 0.31 per cent.

Unsurprisingly, Singapore's benchmark Straits Times Index remained in the red. It dropped 13.81 points or 0.52 per cent to 2,630.76, pushing the five-day drop to 4.38 per cent.

Nomura analyst Mixo Das urged investors to stay calm amid the regional rout. He said in a note yesterday: "Markets have endured a jittery start to 2016 and concerns around China's growth and the yuan may keep volatility elevated near term.

"Still, these risks should fade over time, and the basics of our outlook remain unchanged - a gradual (Federal Reserve) hiking cycle, slowing Chinese growth without a hard landing, and slowly improving sentiment on Asean."

Mr Das added that the sell-off hitting the banking sector in Singapore is not justified.

"True, the economy is highly impacted from a China slowdown, but our bank analyst continues to believe that concerns about asset quality deterioration are overdone," he said.

Still, the banks were among the top losing blue chips, when 19 STI constituents closed lower. DBS dropped 20 cents or 1.35 per cent to S$14.64, OCBC pared eight cents or 1 per cent to S$7.95, and United Overseas Bank shed 23 cents or 1.29 per cent to S$17.60.

Keppel Corp was also down, dropping two cents or 0.41 per cent to S$4.84 as Brent crude futures dipped below US$30 per barrel. However, Sembcorp Marine managed to gain 1.5 cents or 1.09 per cent to S$1.385.

Other gainers on the STI included SingTel, which put on six cents or 1.71 per cent to $3.56, and Hutchison Port Holdings Trust, up one US cent or 2.04 per cent to 50 US cents.

whwong@sph.com.sg