Singapore bourses sink into red, STI ends 41 point down

SINGAPORE - The Chinese New Year festivities did little to lift the mood across the Singapore stock market Wednesday, which sank back into the red amid the global selloff.

The benchmark Straits Times Index (STI) resumed trading after a two-day holiday on a dismal note, falling nearly 3 per cent in just the first 15 minutes of trading.

But it later pared its losses to finish 41.11 points or 1.57 per cent down at 2,582.1.

Concerns over bank stocks worldwide, especially in Europe, and the market rout in Japan, which suffered a bruising 5 per cent fall on Tuesday, continued to weigh down on market sentiment.

Elsewhere in the region, Tokyo continued to head south, sliding 2.3 per cent. Sydney retreated 1.2 per cent, Kuala Lumpur shrank 1.1 per cent, while Shanghai and Hong Kong remained shut for the Chinese New Year holiday.

Wall Street slipped 0.1 per cent on Tuesday.

"Concerns about European banks are contributing to the risk-off mood in markets," said Mr Shinichiro Kadota, chief forex strategist at Barclays in Japan, told Reuters.

"In addition, US data this month has been weak and Fed officials appear to be toning down on rate hikes."

The local banks wound up among the biggest losers yesterday, with DBS Group Holdings sliding 22 cents or 1.6 per cent to S$13.38.

OCBC Bank shed 13 cents or 1.7 per cent to S$7.56, while United Overseas Bank lost 31 cents or 1.7 per cent to S$17.56.

A Nomura report last week noted that Singapore banks tumbled 11 per cent in January, in line with others in the region, as markets "not only questioned their top-line growth but also pondered potential costs via higher non-performing loans".

But it also believes that the banks had "underperformed" owing to concerns over their exposure to China and commodities.

Commodity trader Noble Group shaved half a cent or 1.5 per cent to 32.5 cents on a heavy trade of 50.4 million units, while palm planter Golden Agri-Resources fell one cent or 2.6 per cent to 37.5 cents.

Real estate counters took a beating as well: CapitaLand dived nine cents or 3 per cent to $2.90 and Ascendas Reit sank six cents or 2.5 per cent to S$2.33.

The SGX said it has found that a small group of individuals accounted for almost all the buy volume in Zhongmin Baihui shares since October last year.

It noted that Zhongmin Baihui's shares had stayed relatively stable since Oct 26, 2015, despite declines in the broader market, and rarely closed lower than S$1.76 since the start of this year.

Trading across the bourse amounted to 802.2 million units worth S$1.2 billion.

tsjwoo@sph.com.sg