STI, Asian equities start 2019 in the red
S'pore blue-chip benchmark falls 1% as contraction in indicator of China's factory activity triggers regional sell-off
New Year celebrations are full of fireworks and hope that the days ahead will be brighter and more joyful.
Alas, investors hoping that the fairly positive end to 2018 would continue into 2019 had their hopes crushed yesterday, with Asian benchmarks taking a pummelling to end the trading session in the red.
In Singapore, the Straits Times Index (STI) closed 29.87 points or 1 per cent to 3,038.89 after China's Caixin Manufacturing Purchasing Managers' Index (PMI) for December showed contraction for the first time in 19 months.
The Singapore slide was compounded by official advance estimates showing 2.2 per cent fourth-quarter gross domestic product (GDP) growth for the island nation, missing economist estimates.
But it was the Chinese data that dragged down the entire region, pulling stock markets in Hong Kong, Shanghai, Australia, South Korea and Malaysia lower on the day.
Hong Kong's Hang Seng index bore the brunt of the misery, with the benchmark index falling by 3 per cent in early trading before closing down by 715.35 points or 2.8 per cent at 25,130.35.
Japanese markets remain closed for the new year and will resume trading on Friday.
IG's Pan Jingyi told The Business Times: "We have seen the new orders component within the Caixin PMI declining, reflecting the poor demand conditions that had likely been a result of various growth stressors including the US-China trade item.
"With the worries manifesting in economic indicators' showings, it is of little wonder we are seeing the market reaction today."
Sentiment dented the US dollar as demand for safer investments sent gold prices to its highest since June 18 last year. The yellow metal traded at US$1,287.20 (S$1,760) an ounce at 6.51pm yesterday.
Phillip Futures commodities analyst Benjamin Lu told Reuters: "It looks optimistic and fundamentally supportive for gold as the overall mood is still very uncertain and the market confidence is still weak on global growth worries."
On Singapore economic data, CMC analyst Margaret Yang said: "Lower-than-expected Q4 advance GDP readings suggest Singapore's economy is moderating at a pace faster than market had anticipated."
Of the 30 STI constituents, 20 counters ended the day in the red. Turnover on the bourse stood at roughly 1.46 billion securities worth $763 million, which worked out to an average unit price of 67 cents for each security. Decliners outnumbered advancers 231 to 174.
Ezion Holdings was the most actively traded stock, dropping 0.1 cent to 4.5 cents, with 50.7 million shares changing hands.
Among index-listed stocks, Singtel shares ended five cents or 1.7 per cent lower at $2.88 while Yangzijiang Shipbuilding shares closed flat at $1.25.
Among financials, DBS Group Holdings eased 20 cents or 0.8 per cent to $23.49; OCBC Bank shares fell 16 cents or 1.4 per cent to $11.10; and United Overseas Bank dropped 26 cents to close 1.1 per cent lower at $24.31.
Bucking the trend was Indonesia-based Silkroad Nickel, which stood out as one of the day's top performers. Its shares surged 31.4 per cent to close at a near two-month high of 46 cents on a turnover of about 1.53 million shares. A married trade of about 1.48 million shares at 45 cents apiece at 9.13am appeared to trigger the jump.
The market may not have reached bottom yet, according to CMC's Ms Yang.
"A lot (of) signs are pointing to a global cyclical slowdown and markets have already reacted towards that. The question is how much more of a downside there is before we see a bottom out," she said.
"Before we see a turnaround in economic indicators, the valuation of risk assets are likely to be suppressed."
For full listings of SGX prices, go to http://btd.sg/BTmkts