STI falls as hopes of Greek debt resolution fade

Drop in May factory output also weighs on investor sentiment

THE Singapore market was again weighed down yesterday by the stalemate between debt-crippled Greece and its international creditors, with negotiations dragging on into the weekend.

Fading confidence in a possible resolution to the Greek debt crisis sent the Straits Times Index (STI) slumping 28.97 points, or 0.86 per cent, to 3,320.9, paring mid-week gains.

About 1.16 billion shares worth $864.6 million were traded.

News that the manufacturing output shrank by 2.3 per cent last month, logging its fourth straight year-on-year decline, did little to help as well.

The cheerless sentiment mirrored that on Wall Street.

The Dow Jones Industrial Average slipped 0.42 per cent on Thursday, driven also in part by falling energy shares and crude oil prices.

Across Asia, the Nikkei 225 dipped 0.31 per cent, while Hong Kong's Hang Seng Index lost 1.78 per cent.

Mainland China stocks took a beating as the markets saw further corrections, with the Shanghai Stock Exchange Composite Index plummeting 7.4 per cent - its worst single-day loss since Jan 19.

Investment adviser Rivkin said in a note that further falls in China stocks "will send ripples throughout Asian markets".

The slide in the STI yesterday was led by the three local banks, which each posted losses of more than 1 per cent.

This was likely due to the heavy sell-off in the Chinese markets, said IG market strategist Bernard Aw.

"The downward momentum there - if it continues - could have further impact on the three banks here," he said, noting that they have a "big exposure" to the Chinese markets.

Telecoms giant Singtel was also among the day's blue-chip laggards, taking a dive to close seven cents down at $4.13.

Offshore contractor Ezra Holdings was the most active counter, with 133.9 million shares changing hands. The stock shed 8.8 cents to end at 17.7 cents.

Commodities giant Noble Group continued its winning streak for the fourth straight day, adding 2.5 cents to close at 76 cents.

Property play CapitaLand also rose, by four cents to $3.50.

Outside of the blue chips, Stats ChipPAC, a Singapore chip assembly and testing firm, climbed half a cent to 51.5 cents.

A consortium led by Jiangsu Changjiang Electronics Technology Co, China's largest electronics packaging service provider, had announced earlier in the day its "firm intention" to make an offer for the company.


A version of this article appeared in the print edition of The Straits Times on June 27, 2015, with the headline 'STI falls as hopes of Greek debt resolution fade'. Print Edition | Subscribe