SINGAPORE: Singapore shares fell by midday on Monday as doubts continued about the ability of European leaders to tackle the region's debt woes, with banking and commodity stocks among the worst performers.
At 0545 GMT, the Straits Times Index (STI) was down 2.34 percent, or 63 points, at 2,635.76, and around 848.3 million shares worth S$827.5 million exchanged hands.
"A lot of attention is on how EU will resolve the sovereign debt crisis, particularly whether Greece will get its bailout package and if the officials are going to increase the bailout fund's size," said Ng Kian Teck, lead analyst at SIAS Research, adding that he expected the STI to be supported at 2,600 points this week.
Kim Eng said in a report that recession risk continues to weigh on the shares of Singapore banks, which have sunk to a two-year low. At 0545 GMT, shares of DBS , Oversea-Chinese Banking Corp and United Overseas Bank were down more than 2 percent.
Commodity firms Noble Group and Olam International slumped over 6 percent.
Oil-related stocks were also hammered. Rig builders Keppel Corp and Sembcorp Marine retreated 3.7 percent and 6.5 percent respectively around midday. Smaller cap stocks were not spared, with offshore vessel builder STX OSV down around 9 percent.
"Oil prices have leaked below $80 per barrel and if the trend were to persist, oil companies may hesitate in spending more on deep sea projects," Ng said. "This probably resulted in the underperformance of our oil and gas sector."
But he noted that oil companies may choose to invest more on shallow water or onshore projects, which generally have lower costs.
On Monday, defensive stocks outperformed the broader market. Around 0500 GMT, SingTel shares were up 0.7 percent, while transport operators SMRT and ComfortDelgro lost only 0.6 percent and 0.4 percent respectively.
Comments
Comments are closed for this article.