The bloodletting continued on bourses across the region yesterday on the back of new fears over the oil glut and global economy.
Oil was at the epicentre of investor anxiety, with sanction-free Iran ready to ramp up production in a bid to replenish its coffers. The prospect of even more crude gushing into the global oil lake sent prices diving below US$28 a barrel, levels not seen in 13 years.
Factor in last Friday's sell-off on Wall Street and the stage was set for more stock market carnage.
Dour sentiment, partly caused by a worse-than-expected fall in Singapore's export numbers last month, sent the Straits Times Index down 1.44 per cent, or 37.76 points, to 2,593 - its lowest since October 2011. It is down 10 per cent this year and in the grip of a bear market - defined as a drop of at least 20 per cent from a recent high. The STI is down 27 per cent from its last high in April last year.
Shanghai finished up 0.4 per cent as the authorities fought to stabilise the yuan and bargain hunters jumped in, but a plunge last Friday means it is still down 17.7 per cent this year. Investors are eyeing China's 2015 gross domestic product and other key data due today, and bracing themselves for the slowest pace of expansion since 1990.
Shenzhen closed up 1.9 per cent but is down 20.8 per cent from a recent high and thus in a bear market. Australia's S&P ASX 200 dipped 0.7 per cent yesterday and is off 19 per cent from its recent high. Hong Kong, Kuala Lumpur and Jakarta also fell yesterday.
While oil is the primary concern, there are new challenges ahead, including rising unease over slowing global demand and an uneven US economic recovery. Investor sentiment dived last Friday after weak US sales and production data reignited fears that higher interest rates and a slowing China could derail America's recovery.
Mr Lim Say Boon, DBS' chief investment officer, maintains that a global recession is not on the horizon as both the US and Chinese economies are still growing. "The key risk facing equities markets is a global corporate earnings recession, which may already be here."
Meanwhile, the market decline here is prompting the Society of Remisiers Singapore (SRS) to plan to ask the Monetary Authority of Singapore (MAS) to relax its rules so that remisiers can have a second job outside trading hours.
SRS president Jimmy Ho said in an e-mail last week to members: "With unrealistic demands from broking houses pressing for their minimum performance quotas to be met, some members have actually left or are planning to leave the industry... We are planning to approach the MAS about relaxing its employment rules on remisiers so that (they) can better make ends meet during these difficult times."
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