STI ends a shade lower on Wall St's fall

AFTER the market rushed to year highs on Wednesday, it seemed inevitable that investors would pocket their gains, especially after Wall Street's overnight correction.

The benchmark Straits Times Index (STI) opened lower and drifted aimlessly before closing 13.11 points, or 0.57 per cent, lower at 2,292.97. Markets in Hong Kong, Shanghai and Taiwan were closed for a holiday.

Sentiment was dampened by the 2 per cent fall on Wall Street, driven down by jitters over a looming bankruptcy for General Motors and a sharp rise in US bond yields that could mean higher borrowing costs for companies.

Back at home, banks and CapitaLand led the declines.

CapitaLand, which saw its share price surge 10.2 per cent on Wednesday, slipped nine cents, or 2.37 per cent, to $3.70 after investors locked in profits.

DBS ended 20 cents lower at $11.60, while UOB closed down 18 cents at $14.32.

'The pullback has long been expected though it remains to be seen if the sidelined bargain hunters are still able to prop up the market again as they did the last time a correction looked to be underway,' said Netresearch Asia yesterday.

Trading volume was 2.29 billion shares worth $1.53 billion.

Investors were focused on a few stocks, including Golden Agri-Resources, Genting Singapore and CSC Holdings.

Golden Agri fell two cents, or 4.7 per cent, to 40.5 cents, extending declines into its third day. It was the most actively traded, with 149.6 million shares changing hands.

Genting was another liquid stock with 94.35 million shares traded. It closed unchanged at 71 cents, following a sharp plunge the previous day when the family that owns its Malaysian flagship firm sold its entire 9 per cent stake for 72 cents a share.

'Other than the sharp 16 per cent discount to the previous day's close, we do not think there are any major negative implications behind the move,' said OCBC Research analyst Carey Wong.

Mr Wong added that while the gaming market is very promising, the stock is still richly valued and could be worth buying if it drops further to 60 cents.

Construction firm CSC Holdings added half a cent, or 2.94 per cent, to 17.5 cents with 55.18 million shares traded. The firm earlier reported a 45 per cent fall in fourth-quarter profits to $6.7 million, which was slightly above expectations due to improved cost management and higher recognition of project revenue.

South Korean bulk shipper STX Pan Ocean jumped 72 cents, or 5.15 per cent, to $14.70, taking its cue from its Seoul-listed counterpart, which surged 11 per cent to 13,100 won.

The Baltic Dry Index, a key measure of the cost for shipping commodities, rose 7.6 per cent in London on Wednesday, surpassing the 3,000 level for the first time since last October.

The broader market showed much more resilience, with the FTSE ST Mid Cap and Small Cap Indices adding about 1.5 per cent, extending gains into a second day.