SINGAPORE - The local market opened its first full trading week on a soft note, joining other regional markets in a fall as weak data from major economies hinted at another uncertain year ahead.
The benchmark Straits Times Index (STI) closed at 3,328.28, down 42.31 points or 1.26 per cent. This follows a 1.2 per cent drop in the Dow Jones Industrial Average over last week, as the United States' latest manufacturing data came in below expectations to stir bearish sentiments.
With regional economies such as Singapore, China and Japan also announcing a set of mixed Purchasing Managers' Indices (PMI) yesterday, the market has little reason to cheer, IG market strategist Ryan Huang said.
"Businesses are likely holding back new orders, which will have a knock-on impact on sentiments and weigh on regional markets. When you couple that with the profit taking after the Christmas rally, I am not very optimistic about STI's immediate outlook," he said.
Singapore's December PMI, announced after market close, showed a reading of 49.6, which indicates contraction. China PMI also fell to 22-month low last month.
Against this backdrop, most STI component stocks struggled yesterday, with CapitaMall Trust, Ascendas Real Estate Investment Trust (AREIT) and Singapore Airlines ending the day as gainers.
CapitaMall Trust closed at $2.05, up 0.49 per cent to continue its overall uptrend since around September last year. Singapore Airlines also gained 0.35 per cent to close at $11.59, while AREIT rose 0.42 per cent to $2.41.
SIA's gain came as the carrier is set to see two of its overseas ventures, including an alliance with Air New Zealand and joint venture with India's Tata, star their services this week.
But SIA's low cost unit Tiger Airways did not fare as well, closing 3.7 per cent lower at 26 cents. OCBC Investment Research's Eugene Chua said in a report yesterday: "Bearing in mind that we expect depressed yields in the Southeast Asia region to continue in 2015, we maintain our sell rating."
The resilient banking stocks similarly took a hit yesterday amid the looming economics concerns and selloff for profits. United Overseas Bank and DBS both dropped 2.24 per cent, to $23.96 and $20.04 respectively. OCBC also lost 1.43 per cent, closing at $10.35.
Elsewhere in Asia, Shanghai surged 3.6 per cent to its highest level in five years, as the market continues to bet on the likelihood of government stimulus measures amid its economic slowdown. But Hong Kong did not share the momentum, dropping 0.57 per cent, while Tokyo lost 0.24 per cent.