SINGAPORE - Singapore and other regional markets began Thursday (Aug 20) stuck in a bearish mood, as investors kept their wary eyes on mixed signs of economic outlook.
The benchmark Straits Times Index lost around 1 per cent by 11am, part of the regionwide retreat that also saw the Shanghai Composite drop as much as 1.75 per cent while Hong Kong's Hang Seng Index lost 1.8 per cent, bringing its decline from a seven-year high on April 28 to 20 per cent.
"This was mainly due to the overnight underperformance in the United States and European markets, which is triggering the risk-off sentiments in this region," IG market analyst Bernard Aw told The Straits Times.
In the US, Dow Jones Industrial Average ended 0.93 per cent down on Wednesday, following the release of Federal Reserve's meeting minutes that said the conditions for interest rate hike "had not yet been achieved", but "conditions were approaching that point".
The lack of clarity in the latest Fed signal added uncertainty to the market, which has previously prepared for a September hike that now looks increasingly unlikely.
But investors in Asia are also worried about the volatility in China, Mr Aw noted, saying: "Although the Chinese government has moved to stabilise the yuan after the shock from the previous devaluation, people are still unsure where the currency will go."
For now the volatility around the Chinese markets is looking to thicken. On Wednesday, Shanghai and Shenzhen markets went through a roller-coaster ride to end higher than 1 per cent, but not before state-backed buyers rushed in to put a hold on the earlier slide.
At home, as the wider market struggled, oil and gas plays took a particularly big hit, with Sembcorp Marine losing over 5 per cent in the morning to its lowest since May 2009. Keppel Corp also dropped as much as 2 per cent to its lowest in close to four years.
They dropped as oil prices slid to a fresh six-and-a-half-year low in Asia on Thursday, approaching the key US$40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut.
US benchmark West Texas Intermediate (WTI) for delivery in September, which expires on Thursday, dipped 32 cents to US$40.48 after falling sharply in New York to its lowest level since March 2009. Brent crude for October dropped 25 cents to US$46.91 a barrel.
Shares of jewellery retailer Soo Kee Group fell as the company made its trading debut on Thursday, losing 10 per cent just an hour into its first session. The stocks was trading at 24.5 cents, down 18.3 per cent from its initial public offering price of 30 cents, as at 11.25am.