STI falls in tandem with Asian markets

Weak China manufacturing data, Wall Street losses behind region's downbeat sentiment

The local market ended the day lower amid a region-wide pullback on fresh signs of economic weakness in China.

The benchmark Straits Times Index (STI) was down 3.72 points, or 0.11 per cent, to 3,352.65, as 1.68 billion shares worth $959.3 million changed hands. The index closed 0.02 per cent lower for the week after four straight sessions of decline.

The same downbeat sentiment gripped all key regional markets yesterday, with Shanghai losing 1.29 per cent and Hong Kong down 1.06 per cent. This came as a flash estimate showed that China's purchasing managers' index (PMI) for this month hit a 15-month low, stirring up fears that the economy's slowdown is greater than expected.

Even in Japan, where a similar estimate showed an improved PMI, the Nikkei still dropped 0.67 per cent, while sentiment on Wall Street was equally downbeat as disappointing corporate results sent the Dow Jones Industrial Average down 0.67 per cent.

But the market here still had its bright spots, with Singapore Airlines, the STI's top performer, closing 21 cents, or 1.84 per cent, up at $11.63 and recouping much of its losses this week.

Maybank Kim Eng analyst Mohshin Aziz maintained his hold rating for the carrier, noting recently: "Demand is stagnant but low fuel price could be the next catalyst for growth. Further industry consolidation in the second half and pick-up in the cargo market should improve outlook."

Ascendas Real Estate Investment Trust rose four cents, or 1.64 per cent, to $2.48. The industrial property Reit has been on an uptrend since Wednesday, when it posted a 5.5 per cent rise in distribution per unit for the quarter ended June 30.

Suntec Reit, which on Thursday reported a 10.3 per cent rise in DPU for the quarter to June 30, went up 1.5 cents, or 0.87 per cent, to $1.73.

DBS gained two cents, or 0.09 per cent, to $21.40, ahead of its earnings announcement on Monday, when the bank is expected to deliver another set of strong earnings.

Jardine Cycle and Carriage was the biggest loser among STI stocks, shedding 75 cents, or 2.41 per cent, to $30.33. Jardine Strategic Holdings lost 65 US cents, or 2.03 per cent, to US$31.35.

Keppel Corp and Sembcorp Marine both ended lower as the outlook for offshore and marine companies remains dim. Keppel closed four cents, or 0.49 per cent, down at $8.12 after reporting a 2.3 per cent drop in net profit for the quarter to June 30. Sembcorp Marine lost one cent, or 0.36 per cent, to $2.80.

But Nomura analysts retain their buy rating for SembMarine, reiterating recently that deep-water rig orders could recover later this year.

A version of this article appeared in the print edition of The Straits Times on July 25, 2015, with the headline 'STI falls in tandem with Asian markets'. Print Edition | Subscribe