STI pulls back after hitting a 10-year high

TRADERS here beat a cautious retreat on Wednesday amid the release of modest export figures - just one day after local equities climbed back to pre-global financial crisis levels.

The benchmark Straits Times Index slipped by 8.3 points, or 0.23 per cent, to 3,541.91, after clawing its way back from an intra-day low of 3,534.89 in the afternoon.

The index's decline was no thanks to a slide on all three local banks.

DBS Group Holdings lost S$0.30 to S$26.21, OCBC Bank was down by S$0.03 to S$13.18 and UOB shed S$0.13 to S$28.17.

Another heavyweight drag on the index was Thai Beverage, which lost S$0.02, or 2.13 per cent, to S$0.92, with 71.9 million shares changing hands.

Singtel, too, was a lead weight. With nearly 21.3 million shares traded, the telco slipped by S$0.02, or 0.55 per cent, to S$3.59.

But bourse operator Singapore Exchange bucked the trend, rising by S$0.21, or 2.77 per cent, to S$7.78 on a volume of 7.77 million shares.

It will report its second-quarter results on Friday.

Off the index, manufacturer JEP Holdings topped the actives list once again, with almost 140.1 million shares traded.

It put on 0.8 Singapore cent, or 13.3 per cent, to 6.8 Singapore cents.

The gain came after UMS Holdings said it had bought a 7.48 per cent stake in JEP for S$5.7 million.

But mainboard-listed UMS, a precision engineering group, dipped by S$0.01, or 0.96 per cent, to S$1.03 on a volume of 1.7 million shares.

Manufacturers did face some pessimism on the news that Singapore's electronics exports shrank by 5.3 per cent year-on-year in December, after two months of growth.

Semiconductor company Asti Holdings fell by 0.1 Singapore cent, or 1.18 per cent, to 8.4 Singapore cents, with 4.01 million shares moving.

Yet this gloom was shrugged off by other large electronics stocks.

Solutions provider Ellipsiz put on 2.5 Singapore cents, or 3.38 per cent, to S$0.765, while STI constituent Venture Corporation added S$0.22, or 0.97 per cent, to S$22.81.

The research team at KGI Securities (Singapore) said: "We may expect some profit-taking after the surge in Brent oil prices to US$70 per barrel lifted energy-related stocks".

Its analysts said that the oil and gas industry remains favourable but it might be wise to wait for "more attractive re-entry opportunities after the recent run-up in prices".

Meanwhile, IG Asia market strategist Pan Jingyi said in a morning note that a new softening in oil prices has taken its toll on investor sentiment and "the leads may be pointing towards a moderate decline" here.

The STI's bashful performance for the day was at odds with that of its counterpart in Hong Kong, where the Hang Seng topped Tuesday's record close with a fresh 0.25 per cent gain.

But Singapore's index matched the hesitation on Wall Street, where earnings season has pressed "pause" on the United States's equities rally.

CMC Markets' man in London, chief market analyst Michael Hewson, wrote: "There wasn't any immediate catalyst for yesterday's sharp sell-off, apart from some weakness in commodity markets, but US markets' inability to hold onto these sorts of gains might suggest that some sort of pullback could be due after the strong start to this year."

He added, on a more ominous note: "Either that, or investors are starting to get a little nervous ahead of a possible US government shutdown at the weekend."

Asian investors can look forward today to growth and industrial production numbers from China, while those here may want to keep their eye on Cache Logistics Trust's latest financial results, to be released after the market closes.

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