Source : TODAY, Wednesday, October 17, 2007
Shares tumble 1.3% as slow new home sales hurt property stocks
RENEWED concerns over the United States subprime crisis and high crude oil prices shook Singapore shares yesterday, sending the index tumbling 1.3 per cent at the close.
The Straits Times Index lost 51.3 points to end at 3810.7, on a volume of 3.35 billion shares, up from Monday’s 2.69 billion, while losers overwhelmed gainers 722 to 216 in the broader market.
“It is across the board selling, coming on the back of the weakness of Wall Street and high oil prices and also concerns that as the third quarter earnings season kicks off, there could be disappointment,” said Mr Vasu Menon, chief editor of online bank, finatiQ.com.
The market has had a good run in recent weeks, and with “a heavy week in terms of US economic data and earnings numbers, investors are taking a more cautious stance by locking in profits,” he said, adding that if earnings do not disappoint, the market could stage a rebound.
Wall Street shares fell after Citigroup warned that the credit crisis would dent fourth-quarter earnings. Some interpreted negatively the creation of a fund by large US banks aimed at ensuring liquidity in the still struggling US commercial paper market.
Fears that the sector was getting a bailout sent reverberations through Asia yesterday.
Latest Urban Redevelopment Authority figures showing a slowdown in new home sales added to the gloom, hurting property stocks, while high crude oil prices added to the growing risk aversion.
Among blue chips, DBS Group fell 20 cents to $22.20, United Overseas Bank lost 60 cents to $22.10, Oversea-Chinese Banking Corp was down 20 cents at $9.15, Singapore Telecommunications fell 2 cents to $4.08 and Singapore Airlines dropped 50 cents to $19.60.
However, oil-related shares gained. Oil refiner Singapore Petroleum, which has oil fields in Indonesia and China, rose 65 cents to $8.80.
Neptune Orient Lines (NOL) rose 5.6 per cent to $5.70 after reporting a 26-per-cent rise in container revenue for the most recent month.
In a note to clients, Lehman Brothers said NOL continues to benefit from improving freight rates and reiterated its “overweight” rating on the shares.
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