SINGAPORE shares closed a rather bumpy week by extending its third straight day of losses after panic set in as the probability of a recession heightened amid a tightening trajectory by central banks. Weak global macro data on the back of rising cost pressures and supply chain disruptions further hurt trading sentiments.
The key Straits Times Index (STI) slipped 6.62 points or 0.21 per cent to 3,095.59 after Wall Street capped its worst half-yearly trading in more than half a century overnight.
"Despite a rebound mid-month, momentum remained weak ... To add fuel to the fire, the STI dipped below the 252 long-term EMA (exponential moving average), officially putting the index on a bearish trend. The rejection of the 22-EMA accelerated downside pressure on Jun 30. The next major support to watch in the midterm is at 3,024.66 points," said CIMB -CGS Research in a strategy note issued on Friday (Jul 1).
Key gauges across the Asia-Pacific tumbled from Japan, China and Taiwan to South Korea and Australia, with Malaysia bucking the trend with marginal gains. The Hong Kong market was closed for Hong Kong Special Administrative Region Establishment Day.
"With central banks shifting towards accepting that monetary tightening is impossible without some economic damage, the market narrative has swung 180 degrees this week -- and indeed, that wind direction change has taken place in real time," remarked Stephen Innes, managing partner of SPI Asset Management. He added that the market was panicking over slumping growth even more so now than stubborn inflation.
He further cautioned: "With central banks willing to hike into the perfect financial storm, cracks in consumer demand will surely widen and cut deeper worldwide, which could exert significant disinflationary forces if the central banks act too aggressively for too long."
On the home front, some 707.02 million securities worth S$832.61 million were traded. Losers outpaced gainers, with 196 counters down and 130 up. The day's losses were led by DBS, Jardine Cycle & Carriage and City Developments.
Golden Agri-Resources : E5H -2% was the day's second most actively traded with 33 million shares done. The plantations giant could be a potential beneficiary if Indonesia raises its biodiesel mandate, which it is currently mulling, said CIMB -CGS Research in a recent note. This will allow biodiesel producers such as Golden Agri-Resources, First Resources and Wilmar International to expand their revenue and earnings base. The counter retreated S$0.005 or 2 per cent to S$0.245.
Keppel Corp : BN4 +0.46% said a subsidiary of its wholly-owned Keppel Land unit has ended a joint venture announced 2 years ago with Emerald Haven Realty to develop a residential project in Chennai in south-eastern India. Shares of Keppel inched up S$0.030 or 0.46 per cent to close at S$6.52.
Sumber : businesstimes.com.sg
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