STI narrowly avoids sixth day of loss

THE Straits Times Index on Wednesday underwent a volatile session tracking movements in Hong Kong and China as well as the futures market for US benchmarks.

It first fell 15 points to an intraday low of 2,772 before rebounding into positive territory in the wake of gains in the Hang Seng and Shanghai Composite and a 140-points or 0.9 per cent rise in the Dow futures that brought hope that Wall St would rally on Wednesday. Most of these gains were erased at the close, though the index managed to avoid a sixth straight loss when it finished with a gain of 2.95 points at 2,790.89.

For the quarter, it shed 527 points or 16 per cent. For the year to date, it has lost 17 per cent.

Turnover on Wednesday was boosted by active trading in commodity stocks Noble and Golden Agri, as well as Singtel. These three STI components helped the 30-stock index record volume of S$1.07 billion, which in dollar terms was 82 per cent of the entire market's turnover of 1.1 billion units worth S$1.3 billion.

Brokers, however, warned that the index's Tuesday bounce of 47 points off its intraday low which was followed by a similar move on Wednesday probably does not indicate that the worse is over.

"China's slowdown amidst structural reforms is probably not over yet," said a dealer. "The same applies to the correction in its stock market."

Shares of the Singapore Exchange (SGX) on Wednesday traded ex-dividend and fell S$0.16 to S$7.03 on volume of 4.6 million. SGX is paying a final dividend of S$0.16 per share.