SINGAPORE - Local shares were hit by another bout of selldown, alongside regional markets that were rocked by news that the oil price and the Chinese currency have hit a low.
Singapore's benchmark Straits Times Index (STI) dropped 13.83 points or 0.49 per cent to 2,834.63. For the week, it pared 1.54 per cent, marking a lack of festive mood as investors eye an uncertain year-end.
Once again, the plunging oil prices were a top concern for the emerging markets Friday, after the global crude benchmark Brent futures slipped to US$39.53 (S$55.45), just a hair above its seven-year low.
But increasingly investors are seeing more cause for concern beyond the persistent weak commodity prices and the impending Federal Reserve rate hike, as the Chinese yuan hit its full-year low and the United States dollar rose to 6.4563 against the yuan.
"A US rate hike would have a major impact on money flows out of emerging markets including Hong Kong and China. Also, if the yuan continues to depreciate, that's negative to stocks as well, because it means investors are not confident about China's economic restructuring," First Shanghai Securities chief strategist Linus Yip told Reuters.
Little wonder that Shanghai shed 0.6 per cent Friday, pushing the weekly drop to 2.6 per cent. Hong Kong lost 1.11 per cent, and Sydney was down 0.18 per cent. Tokyo had a 0.97 per cent increase, but was still off 1.4 per cent for the week.
Back in Singapore, 22 constituent stocks on the STI ended lower, with Jardine Cycle & Carriage down S$1.12 or 3.21 per cent to S$33.80 - the top losing blue chip Friday.
All three banks dropped, led by United Overseas Bank with a nine cents or 0.47 per cent drop to S$19.16. DBS was down five cents or 0.30 per cent to S$16.41, and OCBC closed down two cents or 0.23 per cent to S$8.62.
Banking plays are regarded as a safe bet given that the widely expected rate hike may boost the banks' interest margins. But DBS analyst Lim Sue Lin said the impact may actually be limited.
In a note, Ms Lim said: "We believe the net interest margin (NIM) uptick may be muted as we expect funding costs to catch up, dampening the impact of loan yield increases on NIM.
"If the excitement of the NIM spike for the Singapore banks cools off, there leaves hardly any drivers for growth in 2016."
On the other end of the STI, Singapore Exchange gained the most, rising seven cents or 0.95 per cent to S$7.47, while Singapore Press Holdings put on one cent or 0.26 per cent to close at S$3.88.
Outside the blue chip segment, Jasper Investments was the top active counter of the day, with 36.2 million shares transacted. It rose 0.4 cents or 50 per cent to 1.2 cents. The penny play has been on a roller coaster ride through the year, but the engineering and construction company was able to reverse its loss in the quarter to Sept 30, it announced last month.
BHG Retail Real Estate Investment Trust (Reit) had a muted debut on the SGX on Friday, closing flat at 80 cents, its offering price.
Singapore Post, whose chief executive Wolfgang Baier resigned on Thursday, dropped four cents or 2.28 per cent to S$1.715.