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Singapore: China's crash hits local stocks
When China stocks and the Hong Kong market were surging earlier this year, there was no sympathetic movement in local stocks. This caused much frustration among observers here who had grown accustomed to trading here following Hong Kong's lead. Even more frustrating was Wednesday's 55.94 points or 1.7 per cent loss at 3,284.99 that the Straits Times Index suffered which came as a direct consequence of the Hang Seng's almost 6 per cent crash.
The spillover selling here was widespread, leading to an advance-decline score of 73-426 excluding warrants. Volume was the highest in several days at 1.8 billion units worth S$1.6 billion.
Brokers were despairing when asked to describe the day's trading, their responses punctuated by the usual expletives best left unprinted. All pointed to China as the culprit, although many acknowledged that the as-yet unresolved Greek situation also played a part.
The massive selling in China was described as a direct consequence of an unwinding of widespread margin positions taken by millions of retail punters eager to latch on to the rally of earlier months.
Over the weekend China regulators introduced measures to shore up the country's plunging market, measures which observers said may have added to the problem.
Whatever the case, the extreme volatility in China was said to be keeping investors away. However, not all was doom and gloom - among the stocks which held firm in the face of the selling was IHC, which ended unchanged at S$0.30 with 37 million done.