No respite here despite firmer footing in China

No respite here despite firmer footing in China

LOCAL shares slid for the third day this week despite Chinese markets stabilising on news that government moves to curb volatility will become long-term measures.

It was announced that the ban in China on major shareholders dumping shares will remain in place until new rules in this area are drawn up.

This pushed China's benchmark Shanghai Composite up 2.25 per cent, after the 7.1 per cent plunge in the first two days of the week.

But other regional markets were less buoyant. Hong Kong was down by 0.98 per cent, Tokyo pared 0.99 per cent and Seoul lost 0.26 per cent, a muted response to North Korea's surprise announcement of a successful hydrogen bomb test.

The benchmark Straits Times Index here closed down 29.96 points or 1.06 per cent to 2,804.27, testing the 2,800 level that it had held through the last year. Whether the line will hold depends on what news the latest Federal Reserve meeting minutes would bear, remisier Alvin Yong noted.

The minutes were released early this morning.

"If the message is dovish - for instance, suggesting that the further rounds of rate hikes will be gradual this year - then we may see the Dow recovering to give the local market some uplift," he said.

The Dow Jones Industrial Average stayed virtually flat overnight, gaining just 0.06 per cent.

"Regardless, the overall market will remain weak as investors head into the uncertain earnings seasons. Weak oil prices...also remain a concern," Mr Yong added.

Brent futures dropped further from US$37 on Monday to US$35.20, a new 12-month low, on news of Saudi Arabian price cuts to undercut regional rival Iran.

Unsurprisingly, offshore marine plays Sembcorp Marine and Keppel Corp were among the top losing blue chips yesterday. SembMarine dropped six cents or 3.51 per cent to its 12-month low at $1.65. Keppel Corp shed 22 cents or 3.41 per cent to close at $6.23.

Only six STI counters ended on a positive note, led by Sats, which rose five cents or 1.3 per cent to $3.89.

The flight service provider was one of last year's standouts, gaining 30 per cent in the past 12 months despite persistent market headwinds.

Tiger Airways closed flat at 45 cents. The price will likely remain static in the coming days as it is already on par with Singapore Airlines' buyout offer.

Singapore Post dropped 10 cents or 6.21 per cent to $1.51, with 31.3 million shares transacted. The price and volume drew queries from the Singapore Exchange, and may bring investor attention back to the recent news of potential governance issues around independent director Keith Tay.

Film company Spackman Entertainment Group gained 0.8 cent or 5.84 per cent to 14.5 cents, a day ahead of the Korean release of its new film Chasing. Its previous movie, The Priests, was a box-office success.

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