SINGAPORE (THE BUSINESS TIMES) – Wall Street rallied overnight, but regional investors were not convinced and drove down shares for a second day, with the bloodletting far more pronounced than Wednesday’s minor flesh wounds.
The Nikkei 225 fell 0.88 per cent, South Korea’s Kospi closed 0.99 per cent lower, while Hong Kong’s Hang Seng dived 2.89 per cent.
It was much the same here, with the Straits Times Index (STI) falling 1.08 per cent, or 34.01 points, to 3,107.59. Losers well outpaced gainers 411 to 143 on trade of 1.7 billion shares worth $1.48 billion.
Once again, the only regional bright spot was in Australia where the ASX 200 inched up 0.2 per cent for its best finish in a fortnight.
It was lean pickings among the STI constituents here, with Jardine Matheson the sole gainer for the day. The stock edged up 0.63 per cent to US$65.17.
Yangzijiang Shipbuilding fell to the bottom of the STI, down 2.78 per cent to $1.40.
Wilmar International and City Developments (CDL) were also among the day’s worst performers. Both counters fell 2.43 per cent, with Wilmar ending at $4.42 and CDL closing the session at $6.84.
CGS-CIMB analyst Lim Siew Khee noted on Wednesday that in anticipation of Singapore’s second-quarter results season starting on July 19, “the additional restrictions imposed from May 16 to June 13 (phase two heightened alert) could see the earnings per share upgrade momentum taper… after three consecutive quarters of upgrade”.
She added: “Notably, banks, which typically drive the market earnings per share, may be more conservative in their assessment of asset quality amid the resurgence of Covid-19 cases in the region, with the risk of loan moratoriums being introduced.”
Investors in the United States are beginning to temper their optimism about the months ahead – a mood change that will impact here.
Shares have scaled record highs this year but concerns are growing about increasing pressure on the jobs market, with vacancies rising and hitches around supply chains.
Add in fears about the contagious Delta variant and the climate for a sharp pullback looks to be building, say analysts.
