Weak China data ends two-day stock rally, STI closes 47 points down

The benchmark Straits Times Index (STI) was down 47.23 points or 1.56 per cent to 2,984.88 on Oct 13, 2015.
The benchmark Straits Times Index (STI) was down 47.23 points or 1.56 per cent to 2,984.88 on Oct 13, 2015. PHOTO: AFP

SINGAPORE - Local shares snapped their two-day rally and other regional markets also struggled, as the latest economic data out from China pointed to further growth uncertainties while corporate earnings outlook in Singapore offers little to cheer for.

The benchmark Straits Times Index (STI) was down 47.23 points or 1.56 per cent to 2,984.88, marking a blip in the multi-day recovery that pushed the index above the 3,000 level on Monday (Oct 12) for the first time since Aug 20.

Remisiers were unsure whether the market is having a firm recovery, with Mr Alvin Yong expecting STI to remain range bound in the days to come.

"There's not a lot of good news on the macro-economic front, especially with China still struggling," he said, referring to the 20.4 per cent year-on-year fall in China's September import reported yesterday.

Along with the persistent uncertainties around the timing of interest rate hike in the United States, the news sent many regional markets into the red.

While Shanghai managed to closed 0.17 per cent up, the marginal gain came after a very volatile session as investors weighed their anxiety with expectations for more government stimulus measures. Hong Kong pared 0.57 per cent, and Tokyo was down 1.11 per cent.

In Singapore, investors are keeping an eye on the policy announcement today by the Monetary Authority of Singapore. An easing of the Singdollar - as expected by many market watchers - will be a reminder that Singapore's economy is indeed facing a technical recession.

Mr Desmond Leong said: "I think investors here had pretty much priced that concern in in last month's selldown. I think there is a chance that we may have a sustained recovery, with some opportunities to take profit along the way, which the market sorely needs."

But the upcoming earnings season, which is unlikely to offer many pleasant surprises, will keep the pressure on sentiments, Mr Leong cautioned.

STI companies will start reporting the latest quarterly results starting this week with Singapore Press Holdings and CapitaLand Mall Trust, while Keppel Corp and Sembcorp Marine will do so next week.

The two offshore and marine plays were among Tuesday's (Oct 13) top losing blue chips, with Keppel Corp closing 25 cents or 3.36 per cent down at $7.20 while Sembcorp Marine ended 9 cents or 3.31 per cent lower at $2.63.

This came as crude oil benchmark Brent pared 5 per cent overnight to US$50.06 per barrel, signifying the severity of the global commodity woes.

Other top losing blue chips included Noble Group, which ended 4.5 cents or 8.74 per cent lower at 47 cents and down for the first time since Oct 6.

On the other end of the ledger, Singapore Press Holdings went up 1 cent or 0.25 per cent to $4, while Singapore Airlines gained 4 cents or 0.36 per cent to close at $11.02.

whwong@sph.com.sg