Regional bourses start week on mixed note over oil, China data, STI down 27 points

An investor looks at an electronic board showing stock information at a brokerage house in Huaibei.
An investor looks at an electronic board showing stock information at a brokerage house in Huaibei.PHOTO: REUTERS

SINGAPORE - Asia markets had another mixed start to the week, with investors uncertain over the outlook amid further signs of slowdown in China and the still weak oil prices.

Shanghai pared 1.78 per cent, Shenzhen dropped 1.04 per cent and Hong Kong lost 0.44 per cent on Monday, following news that China's purchasing managers index sliding to a three-year low in January.

Local shares caught the bearish mood and the benchmark Straits Times Index dropped 26.7 points or 1.02 per cent to 2,602.41, ignoring the 2.47 per cent rise to Dow Jones Industrial Average last Friday while snapping the four-day recovery since last week.

Volume was below average at 976.8 million shares worth S$975.4 million changing hands.

"It seems like people saw the opportunity to sell off and get out. The local mood is still very tentative, and many are still looking to sell to avoid market uncertainties. I don't think we'll see a V-shaped recovery anytime soon," remisier Desmond Leong said.

Twenty component stocks on the STI ended the day on a low note, and Global Logistic Properties was the top loser. Its shares closed 6.5 cents or 3.85 per cent down to S$1.625.

GLP is set to announce its third quarter results on Thursdays, and investors will keep a cautious eye on how its Chinese and Japanese logistics portfolio fared in the period amid strong economic headwinds.

Sembcorp Marine pared 5.5 cents or 3.54 per cent to S$1.5, while Keppel Corp was down 12 cents or 2.39 per cent to S$4.9. The duo remained under pressure, as crude oil benchmark Brent lingered around US$35 per barrel.

Noble Group also dropped, shedding 0.5 cents or 1.61 per cent to 30.5 cents with 102.5 million shares transacted, making it the top active counter across the whole market.

Yangzijiang Shipbuilding led the gainers yesterday, up six cents or 6.45 per cent to 99 cents, while City Developments went up 23 cents or 3.3 per cent to S$7.19.

"Companies with China-based businesses may be getting a boost because of expectation of further rate cut by the People's Bank of China in response to the weak factory data," remisier Alvin Yong said.

Meanwhile, the recent move by the Japanese central bank to drop interest rates into the negative territory is being regarded with caution, even though it sparked a 1.98 per cent rally at Tokyo on Monday.

"This move comes out of weakness and also raises the risk that China may retaliate with a further depreciation of its currency. If so, we will have entered a new phase in the currency wars where countries fight over a limited amount of global growth, an outcome which does not bode well for risk assets," Schroders chief economist Keith Wade said in a note.