Categorized | Singapore Trading News

Singapore Stocks-Down at midday in choppy trade; 3,000 support seen

Singapore shares slipped 0.2 percent by the midday on Thursday in choppy trade, as Moody’s warning that it may downgrade its credit rating for the U.S. spurred fund outflows from Asian equities into safe-haven assets.

By the midday break, the Straits Times Index (STI) was down 7.15 points at 3,081.27. The total value of shares traded in the morning session was S$486.3 million, down from S$558.4 million on Wednesday.

The STI is expected to find support at 3,000, but the afternoon session may see the index extend its losses, traders said.

“The market is running out of postive catalysts. There’s still the fear that investors will sell into any rebound,” said Carey Wong, an investment analyst at OCBC Investment Research.

The risk of a lower credit rating for the U.S. overshadowed Federal Reserve Chairman Ben Bernanke’s suggestion, in testimony to Congress, that the central bank could provide more stimulus if the economy weakens further.

“Although the U.S. markets ended higher overnight, stock index futures dropped sharply after that, suggesting that optimism in the U.S. isn’t strong enough to carry through to this region,” Wong said.

With the lack of positive news, many investors are switching into defensive plays like telecommunications firms that have higher dividend yields, Wong said. StarHub , was up 0.36 percent at S$2.78.

Chinese shipbuilder Yangzijiang fell 2.2 percent to S$1.34 by the midday, on concerns that a slowing economy in the United States and China would dampen global trade and hurt orders for ships.

However, wastewater treatment firm HanKore Environment Tech Group bucked the trend and jumped 5 percent to a two-month high after it said it had reached a deal with a provincial government in China that will allow it to invest in environmental projects.

HanKore said it had signed a strategic cooperation agreement with China’s Xianyang City Environmental Protection Bureau that will give it preferential rights to invest in environmental projects in Xianyang City, with a total value of not less than 1 billion yuan within five years. (Reporting by Charmian Kok)

Adapted from Reuters.

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