Singapore shares took another beating yesterday alongside other key regional markets after the latest sign of an economic slowdown in China unnerved investors.
The benchmark Straits Times Index (STI) fell for the second straight day, declining 22.73 points or 0.79 per cent to 2,845.74, just a hair above the 12-month low of 2,841.
The retreat here was part of the region-wide decline after flash data showed that China's manufacturing activity this month fell to the lowest level in over six years.
HSBC Global Research economist Julia Wang said: "The data highlights the considerable headwinds to growth from soft global demand. This will likely weigh on manufacturing sector output as well as investment, further adding to disinflationary pressures."
Investors, still cautious due to the uncertainty around the timing of the US Federal Reserve's interest rate hike, rushed for exits, pushing the region's biggest benchmark MSCI Asia ex-Japan Index down 2.3 per cent, the biggest daily fall in a month.
The move by the Asian Development Bank overnight to lower its 2015 growth forecast for China to 6.8 per cent did not help, sending Wall Street down 1.09 per cent.
Taking the cue, Shanghai pared 2.19 per cent while Hong Kong lost 2.26 per cent yesterday. The euphoria in Kuala Lumpur over the recently announced market stimulus is also wearing off, sending shares down 1.36 per cent. Trading in Tokyo was closed for a public holiday.
The shorter trading week here due to today's holiday was partly why traders closed their positions, remisier Alvin Yong said, adding: "The local shares will remain range- bound between 2,800 and 3,000 in the near term... I'm not ruling out the possibility of the STI breaking below the 2,800 psychological level, but the Fed's decision to hold back on the rate hike will provide at least some breathing room."
Only six blue-chip counters on the STI closed higher, with Singapore Airlines gaining the most, up 20 cents or 1.89 per cent to $10.81. Another transport play, ComfortDelGro, rose three cents or 1.06 per cent to $2.87.
Outside the STI, mainboard-listed Rowsley enjoyed a 1.3-cent or 8.78 per cent rise to 16.1 cents. Sentiment surrounding the real estate and architecture firm improved after it said on Tuesday that it will convert its stagnant Iskandar project Vantage Bay into a healthcare city.
China Mining International was up 10 cents or 28.57 per cent to 45 cents, two days after it completed its share consolidation.
The volatility surrounding share consolidations that firms are embarking on before the 20-cent minimum trading price rule fully kicks in next year, was discussed at the Singapore Exchange's (SGX) annual general meeting yesterday. Shareholders asked SGX to stabilise the market with more prescriptive guidelines.
SGX closed 1.89 per cent or 14 cents down at $7.27 per cent after the annual general meeting, stretching its fall to a third day.
Noble Group was again the top losing blue chip, dropping 1.5 cents or 3.23 per cent to 45 cents.
DBS Equity Research named Hutchison Port Holdings Trust as a target to buy amid the uncertainties due to its dividend yield of about 7.5 per cent, which is attractive at the trust's current price level. The counter closed flat at 56.5 US cents.