<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>STI at lowest since Dec 2006
</TR><!-- headline one : end --><TR>Brief rally turns into carnage as China drives down regional bourses </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Yang Huiwen
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->INVESTORS who hoped that the March low had become the market's floor received a shock yesterday when the Straits Times Index (STI) closed at a point last seen in December 2006.
The cause this time was China, where the Shanghai market has managed to outdo the Olympic high divers when it comes to rapid descents. It plunged 5.34 per cent to a 19-month low yesterday, triggering a synchronised dive from Taiwan's Taiex Index, which slumped 2.72 per cent, and Hong Kong's Hang Seng, down by 1.09 per cent.
The carnage turned a morning rally in Singapore that had briefly lifted the STI past 2,800 into a sharp afternoon sell-off, which left the index 20.52 points, or 0.73 per cent, down at 2,776.98.
It was the lowest close since Dec 1, 2006, while only 948 million shares worth $1.09 billion changed hands.
Blue chips United Overseas Bank (UOB), DBS Group Holdings and CapitaLand led the main index's sell-off. UOB's 50-cent decline to $19.30 shaved off eight points, while CapitaLand's 23-cent fall to $4.71 wiped off 6.8 points. DBS fell 20 cents to $18.40.
The carnage was also played out on the broader market, with most second-line indexes in the red.
In particular, the Shanghai plunge spooked China plays listed in Singapore - S-chips - and sent the FTSE ST China Index down 4.92 per cent to a record low of 338.28.
The sentiment hit popular S-chip plays FerroChina and China HongXing, which fell 13 cents to $1.08 and 4.5 cents to 37.5 cents, respectively.
More notably, Chinese shipbuilder Cosco Corp dropped 18 cents, or 7.89 per cent, to an 18-month low of $2.10.
Further adding to the bearish sentiment was a marked dip in Singapore's non-oil domestic exports, as demand in the United States and Europe slumped.
Electronics maker Venture Corp fell 32 cents to $9.48, its lowest in more than five months, as concerns of slowing exports and a strong Singdollar continued to cloud its earnings outlook.
Commodity plays were also among the worst performers. Noble Group lost four cents to $1.93, while Wilmar International fell six cents to $3.93.
And as if things are not bad enough, analysts are expecting more bloodletting in the months to come.
DBS Vickers cautioned that 'weakness among the offshore and marine and commodity STI component stocks, as well as lacklustre performance from SingTel, should send the STI below the March low of 2,746, down to 2,680 before a rebound back to 3,160'.
While commodity and offshore and marine stocks are losing favour, the brokerage expects falling inflation pressure to be positive for other stock groups, such as transport plays, including Singapore Airlines and ComfortDelGro.
A dim outlook for earnings growth has also prompted UBS to cut its 12-month target for the STI from 3,450 to 3,150.
It expects to see further earnings-per-share downgrades for next year and 2010 over the next few weeks, 'in the light of our recent bearish assessment of US and global growth'.
Citigroup also expects margins to be 'further compressed between now and the end of the year'.
Market debutant Artivision, hurt by the souring sentiment, ended under water at 15.5 cents, down from its initial public offering price of 20 cents. [email protected]
</TR><!-- headline one : end --><TR>Brief rally turns into carnage as China drives down regional bourses </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Yang Huiwen
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->INVESTORS who hoped that the March low had become the market's floor received a shock yesterday when the Straits Times Index (STI) closed at a point last seen in December 2006.
The cause this time was China, where the Shanghai market has managed to outdo the Olympic high divers when it comes to rapid descents. It plunged 5.34 per cent to a 19-month low yesterday, triggering a synchronised dive from Taiwan's Taiex Index, which slumped 2.72 per cent, and Hong Kong's Hang Seng, down by 1.09 per cent.
The carnage turned a morning rally in Singapore that had briefly lifted the STI past 2,800 into a sharp afternoon sell-off, which left the index 20.52 points, or 0.73 per cent, down at 2,776.98.
It was the lowest close since Dec 1, 2006, while only 948 million shares worth $1.09 billion changed hands.
Blue chips United Overseas Bank (UOB), DBS Group Holdings and CapitaLand led the main index's sell-off. UOB's 50-cent decline to $19.30 shaved off eight points, while CapitaLand's 23-cent fall to $4.71 wiped off 6.8 points. DBS fell 20 cents to $18.40.
The carnage was also played out on the broader market, with most second-line indexes in the red.
In particular, the Shanghai plunge spooked China plays listed in Singapore - S-chips - and sent the FTSE ST China Index down 4.92 per cent to a record low of 338.28.
The sentiment hit popular S-chip plays FerroChina and China HongXing, which fell 13 cents to $1.08 and 4.5 cents to 37.5 cents, respectively.
More notably, Chinese shipbuilder Cosco Corp dropped 18 cents, or 7.89 per cent, to an 18-month low of $2.10.
Further adding to the bearish sentiment was a marked dip in Singapore's non-oil domestic exports, as demand in the United States and Europe slumped.
Electronics maker Venture Corp fell 32 cents to $9.48, its lowest in more than five months, as concerns of slowing exports and a strong Singdollar continued to cloud its earnings outlook.
Commodity plays were also among the worst performers. Noble Group lost four cents to $1.93, while Wilmar International fell six cents to $3.93.
And as if things are not bad enough, analysts are expecting more bloodletting in the months to come.
DBS Vickers cautioned that 'weakness among the offshore and marine and commodity STI component stocks, as well as lacklustre performance from SingTel, should send the STI below the March low of 2,746, down to 2,680 before a rebound back to 3,160'.
While commodity and offshore and marine stocks are losing favour, the brokerage expects falling inflation pressure to be positive for other stock groups, such as transport plays, including Singapore Airlines and ComfortDelGro.
A dim outlook for earnings growth has also prompted UBS to cut its 12-month target for the STI from 3,450 to 3,150.
It expects to see further earnings-per-share downgrades for next year and 2010 over the next few weeks, 'in the light of our recent bearish assessment of US and global growth'.
Citigroup also expects margins to be 'further compressed between now and the end of the year'.
Market debutant Artivision, hurt by the souring sentiment, ended under water at 15.5 cents, down from its initial public offering price of 20 cents. [email protected]
