Singapore stocks close lower as weak economic data weighs on sentiment; STI down 0.6%

SINGAPORE – The lack of leads from Wall Street overnight, coupled with weak economic data from Singapore and China, sent investors into a defensive mood on Wednesday.

The wary sentiment left the Straits Times Index (STI) down 0.6 per cent or 18.39 points to 3,185.38 at the close, with losers beating winners 288 to 228 on the broader market after 1.13 billion securities worth $760.6 million changed hands.

With US markets closed for the Independence Day holiday, local traders turned their focus to Singapore retail sales data, which showed growth of 1.8 per cent year on year in May, down from the 3.7 per cent expansion in April.

Sales were also down month on month, declining 0.2 per cent from April, which reversed a 0.5 per cent gain from March.

The numbers out of China were not inspiring either. Its headline services purchasing manager’s index fell to 53.9 in June, well down from 57.1 in May. A figure above 50 indicates expansion.

SPI Asset Management managing partner Stephen Innes said Chinese policymakers are unlikely to sit idle, and will likely “redouble policy efforts” to support domestic demand and boost confidence.

“Without policy support, there’s a risk that weakening growth expectations could become self-fulfilling,” he added.

Key regional markets closed the day in the red. Japan’s Nikkei 225 fell 0.3 per cent, Hong Kong’s Hang Seng Index declined 1.6 per cent, while the Kospi in South Korea ended 0.6 per cent lower. Australian shares snapped a three-day winning streak, declining 0.4 per cent with nine of 11 sectors in the red.

DFI Retail Group was the worst performer among the 30 STI stocks, falling 3 per cent to US$2.59. Yangzijiang Shipbuilding topped the table, gaining 2.1 per cent to $1.47.

The trio of local banks ended in the red. OCBC shed 1 per cent to $12.23, DBS fell 0.7 per cent to $31.21 and UOB was down 0.3 per cent to $27.83.

THE BUSINESS TIMES