SINGAPORE – Weakness on Wall Street overnight on the back of concerns about interest rates and the Chinese economy set the tone for the region on Friday, with red ink throughout.
The downbeat mood sent the Straits Times Index (STI) slipping 0.6 per cent or 18.84 points to 3,207.75, with losers outnumbering gainers 184 to 177 on the broader market on middling trade of 778.2 million securities worth $671.5 million.
Across the region, major indexes in South Korea, Shanghai and Malaysia were all down.
Japan’s Nikkei dived 1.2 per cent on weaker-than-expected growth after the country released revised second-quarter gross domestic product figures. Australian shares followed suit, falling 0.2 per cent to a nine-day low and down 1.7 per cent for the week. Hong Kong cancelled trading after a “black rainstorm” warning amid the heaviest downpours in 140 years.
The declines followed a mixed night on Wall Street, where the S&P 500 fell 0.3 per cent while the Nasdaq slipped 0.9 per cent – its fourth straight day of decline – amid concerns over Apple sales in China, but the blue-chip Dow Jones Industrial advanced 0.2 per cent.
The STI’s biggest decliner was Jardine Cycle & Carriage, which fell 1.9 per cent to $32.13. Other losers included Jardine Matheson, down 0.6 per cent to US$47.65, and Nio, which fell 2.6 per cent to US$10.15.
The local banks closed in the red: UOB ended 1.1 per cent lower at $28.28; OCBC Bank fell 1.4 per cent to $12.43; and DBS Bank slipped 0.5 per cent to $33.23.
RHB analyst Shekhar Jaiswal believes the Singapore market is still defensive, with a high yield and low valuation at present.
However, if the economic recovery sustains into the fourth quarter, the country could see a re-rating in the equity market closer to the end of the year, supported by the services industry’s resilience, a likely pause in interest rate hikes and a revival in manufacturing and exports, he added. THE BUSINESS TIMES
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