Straits Times: Tue, Jul 10
TEPID job numbers from the United States and a slump in Japan's machinery orders made for a grim start to the week and ended the local bourse's eight-day winning streak.
Investors were spooked by data out of the US and Japan - the world's largest and third largest economies - which signalled a worsening economic outlook.
The gloom hammered the benchmark Straits Times Index (STI), which shed 49.47 points or 1.7 per cent to 2,929.08. The STI had rallied 6 per cent over the previous eight trading sessions.
All eyes are now on the US Federal Reserve, which will release minutes of its latest policy meeting tomorrow. This could indicate if it is leaning towards more stimulus to drive growth.
The markets have factored in the prevailing pessimism which is leading some analysts to say further downside may be limited.
'We think it's wrong to be too bearish. Valuations are cheap, investors already ultra-gloomy... indexes can rise in line with earnings growth,' said HSBC Global Research.
The losers here included CapitaLand, down nine cents or 3 per cent to $2.89. The real estate giant said it will buy a serviced residence from Ascott Residence Trust for $359 million and redevelop it.
GSH Corp surged 0.7 cent or 9 per cent to 8.5 cents. The firm, formerly JEL Corp, said it is exploring opportunities in China's property and construction sector. Last Friday, shareholders gave the nod for the placement of two billion new shares worth $14 million to Mr Sam Goi Seng Hui. Mr Goi is expected to play a key role in the firm's ambitions in China, given his strong connections in the country.
Cosco Corp continued its slide, down four cents or 4 per cent to $1.015. The stock is Credit Suisse's least preferred in the sector given its high vulnerability to customer defaults and order cancellations as European customers form 78 per cent of its shipbuilding orderbook.
Nera Telecommunications slid five cents or 11 per cent to 39.5 cents after its shareholders voted against a proposed privatisation offer by the Singapore Technologies Engineering unit. ST Engineering fell three cents or almost 1 per cent to $3.17.
Genting Singapore fell two cents or 1.4 per cent to $1.385. Maybank Kim Eng downgraded the stock to hold from buy after the Government proposed to tighten casino laws. 'Investors will be concerned with this near-term uncertainty rather than its long-term prospects.'
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