- POSTED: 04 Feb 2014 18:52
Singapore shares continued to slide on Tuesday, as disappointing US manufacturing data sank US and other Asian markets.
SINGAPORE: Singapore shares continued to slide on Tuesday, as disappointing US manufacturing data sank US and other Asian markets.
Tokyo stocks led the decline in Asian markets, slumping 4 per cent on Tuesday.
With the exception of Shanghai and Taipei -- which remained closed for the Lunar New Year holiday -- markets across Asia ended in the red.
In Singapore, the Straits Times Index fell for the fourth straight session, dropping 25.15 points, or 0.84 per cent, to close at 2,965.80.
The index remained below the key support level of 3,000 points and at a 14-month low.
Tuesday's sell-off was attributed to worse-than-expected US manufacturing figures, which most analysts see as a blip caused by "adverse weather conditions".
Sentiment was also weighed down by ongoing fears of capital flight caused by Fed tapering, and a slowdown in the Chinese economy.
However, analysts said it was too early to call it a bear market.
They said the Singapore market was just starting to move in tandem with the global markets.
Gabriel Yap, executive chairman of GCP Global, said: "If you look at Singapore from last year, while the emerging markets like the Philippines, Thailand, Indonesia saw a 20 per cent sell-off while the US market went up by 30 per cent, Singapore was in a very tight trading range of 130 points (between 3,060 and 3,190).
"And right now... the Singapore market's downward movement seems to mirror the market's downward movement in the US."
Some analysts see the local market's sell-off as overdone, given that Singapore boasts a rare triple-A sovereign rating, a current account surplus which is around 17 per cent of GDP and foreign exchange reserves at around 100 per cent of GDP.
Furthermore, it is also relatively less exposed to the emerging market economies that are vulnerable to capital flight amid Fed taper fears.
Michael Wan, an Asia ex-Japan economics analyst at Credit Suisse, said: "Singapore is not very exposed to economies such as Argentina, Brazil, and South Africa. If we combine all... our exports to them form about 2 per cent of GDP.
"But our exposure to regional economies is much more important."
Singapore's combined exports to India and Indonesia form about 6.3 per cent of GDP, while exports to China account for another 4.5 per cent.
But even then, they are dwarfed by exports to US and Europe, which make up 20 per cent of GDP.
At the close of trading, total volume stood at 1.99 billion shares valued at S$1.27 billion.
Losers overwhelmed gainers by a three to one margin, with 328 counters declining while 108 stocks finished higher.
Property shares were mostly weaker, with City Developments shedding 3 cents to S$8.68, CapitaMalls Asia dropping 2.5 cents to S$1.69, and Keppel Land moving down 3 cents to S$3.10.
Banks also ended lower -- DBS fell 24 cents to S$16.30, OCBC lost 8 cents to S$9.09, while UOB declined 28 cents to S$19.50.