Asian markets battled through another tepid start to the week, with investors jittery amid further signs of the extent of China's slowdown.
Shanghai shed 1.78 per cent, Shenzhen dropped 1.04 per cent and Hong Kong lost 0.44 per cent, following news that China's purchasing managers' index had slipped to a three-year low last month.
Local shares caught the bearish mood and the benchmark Straits Times Index shed 26.7 points or 1.02 per cent to 2,602.41, ignoring the 2.47 per cent rise of the Dow Jones Industrial Average last Friday - and snapping a four-day recovery. Volume was below average, with 976.8 million shares worth $975.4 million changing hands.
"It seems like people saw the opportunity to sell and get out. The local mood is still very tentative... I don't think we'll see a V-shaped recovery any time soon," remisier Desmond Leong said.
Twenty components of the 30-stock STI ended on a low note, with Global Logistic Properties the top loser as it tumbled 6.5 cents or 3.85 per cent to close at $1.625.
GLP is set to announce its third- quarter results on Thursday, and investors will keep a cautious eye on how its Chinese and Japanese logistics portfolio fared in the period.
SIA Engineering announced a 6.7 per cent year-on-year rise in net profit for the quarter ended Dec 31. It slid five cents or 1.45 per cent to $3.41 ahead of the announcement.
Sembcorp Marine pared 5.5 cents or 3.54 per cent to $1.50, and Keppel Corp slid 12 cents or 2.39 per cent to $4.90. The duo are under pressure with the oil price falling.
Noble Group shed 0.5 cent or 1.61 per cent to 30.5 cents with 102.5 million shares transacted, making it the most active counter.
Yangzijiang Shipbuilding led the gainers, putting on six cents or 6.45 per cent to 99 cents, while City Developments jumped 23 cents or 3.3 per cent to $7.19.
Firms with China-based businesses "may be getting a sentiment boost because of expectation of further rate cut by the People's Bank of China in response to the weak factory data", remisier Alvin Yong said.
Other expectations are also emerging, with some likely relooking the rumour that Yanlord Land Group may be getting acquired by CapitaLand to boost its Chinese footprint. Yanlord rose five cents or 4.9 per cent to $1.07.
Meanwhile, the recent move by the Japanese central bank to drop interest rates into negative territory is being regarded with caution, even though it sparked a 1.98 per cent rally in Tokyo yesterday.
"This move comes out of weakness and also raises the risk that China may retaliate with a further depreciation of its currency. If so, we will have entered a new phase in the currency wars where countries fight over a limited amount of global growth, an outcome which does not bode well for risk assets,'' Schroders chief economist Keith Wade said in a note yesterday.