STI declines third day in a row

The Straits Times Index (STI) closed 4.64 points or 0.16 per cent down at 2,878.13 on Wednesday, Sept 2, 2015, a third straight day of decline.
The Straits Times Index (STI) closed 4.64 points or 0.16 per cent down at 2,878.13 on Wednesday, Sept 2, 2015, a third straight day of decline. PHOTO: AFP

SINGAPORE - The local market was unable to end on a positive note despite a mid-day surge on Wednesday, dragged down by the uncertain mood that continued to pressure key markets worldwide.

The benchmark Straits Times Index (STI) closed 4.64 points or 0.16 per cent down at 2,878.13, marking a third straight day of decline. Across the whole market, around 1.1 billion shares worth S$904 million changed hands.

But there was a brief bounce in the trading hours that pushed STI up to 2906 by noon, before the gains were wiped off by the afternoon selldown.

Remisier Alvin Yong said: "The bulls attempted a counter attack yesterday after days of bearish sessions. This is due partly to expectations for central banks in Asia to loosen monetary policies, and that's why we saw similar intra-day gains in Hong Kong, Shanghai and Japan. Unfortunately it couldn't hold, and Singapore was similarly dragged down."

Shanghai pared 0.2 per cent, Hong Kong was down 1.18 per cent, and Tokyo ended 0.39 per cent lower.

Talks of further monetary easing have persisted amid the string of disappointing economic data in the region. In China, manufacturing activities in August were hit by the worst contraction since March 2009, according to the final Caixin purchasing managers' index reading. In Japan, official data this week highlighted a fourth straight month of month-on-month economic contraction in July.

As the signs of uneven global growth piled up, the United States markets were similarly spooked, with Dow Jones Industrial Average losing 2.84 per cent overnight. Notably, the pace of expansion in the US manufacturing sector also slowed down, the Institute for Supply Management index showed.

Local shares are unlikely to see major recovery as a result of the choppy backdrop, Mr Yong cautioned, adding: "I believe the STI will remain range-bound between 2,800 and 3,000 for at least a couple of weeks, until the next Fed meeting in mid-September provides more market clarity."

Still, as many as 11 blue chip counters managed to close higher on the STI yesterday. Hutchison Port Holdings Trust closed 1.5 US cents or 2.86 per cent up at 54 US cents, Olam International gained 5.5 cents or 2.77 per cent to S$2.04, and Noble Group was up one cent or 1.92 per cent to 53 cents.

On the other end of the ledger, Thai Beverage was the top losing blue chip, closing two cents or 2.82 per cent down at 69 cents. Global Logistic Properties was down four cents or 1.85 per cent to S$2.12.

whwong@sph.com.sg