Singapore shares head south as investors remain wary of key market risks

SINGAPORE - A dour mood continued to hang over the local market, on a day when fresh gunfights in Paris again dampened market sentiment. China's frail outlook also weighed heavily on investors.

Singapore's benchmark Straits Times Index ended 30.7 points or 1.05 per cent lower at 2,886.08. Overall market volume was low, with some 951.1 million shares worth $902.8 million changing hands.

Elsewhere, markets were mostly down. Shanghai fell 1.01 per cent, Hong Kong dropped 0.34 per cent, and Kuala Lumpur closed down 0.3 per cent. Nikkei rose a marginal 0.09 per cent.

The weak regional showing followed news that the French police engaged terror suspects in a deadly raid, reminding global investors of the strong geo-political headwinds and the need to curb risk appetite.

News from China was just as discouraging. At the Asia Pacific Economic Cooperation summit, Chinese president Xi Jinping said that China's economy is still coping with "considerable downward pressure".

With the slew of downside risks on investors' mind, the blue chips had a torrid day, with only three STI constituents closing up.

Ascendas Real Estate Investment Trust was the top gainer of the bunch, up two cents or 0.89 per cent to $2.26. CapitaLand went up one cent or 0.33 per cent to $3.07.

But the rest of the STI component stocks struggled, with Yangzijiang Shipbuilding down 3.5 cents or 3.06 per cent to $1.11.

Energy and commodity stocks were also hammered, after Brent crude futures settled down 2.2 per cent overnight at US$43.57 per barrel.

As a result, Sembcorp Industries lost 10 cents or 2.94 per cent to close at $3.3, Sembcorp Marine pared five cents or 2.22 per cent to $2.20, and Keppel Corp dropped 12 cents or 1.76 per cent to $6.69.

Against the choppy backdrop, investors are likely to look more at the opportunities in the small and mid cap segment, remisier Alvin Yong noted.

"I continue to see stocks in the segment trading substantially below their book value. Some, like Neptune Orient Lines, are getting attention for talks of corporate actions," he said.

NOL, which rose one cent or 0.89 per cent to $1.13, confirmed it is still in talks with foreign conglomerates which are looking to acquire the shipping firm. NOL had earlier stated that interest bidders include France's CMA CGM and industry giant Maersk.