Shares down at midday on China inflation concerns, property in focus

Singapore shares fell at midday on Friday as investors were concerned about further cooling measures in China, which released data that its inflation jumped to a 32-month high, and traders saw further downside to the Straits Times Index (STI).

Property stocks like CapitaLand (CATL.SI) and City Developments (CTDM.SI) may be in focus in the afternoon after Singapore’s Urban Redevelopment Authority said 1,386 private residential homes were sold last month, compared to 1,105 units in February, in a sign that residental market remains healthy.

By the midday, the STI <.FTSTI> was down 0.25%, or 7.94 points, at 3,150.98. The total value of shares traded in the morning session was $654.7 million, slightly lower than $689.2 million on Thursday.

 

Local traders said the STI may fall more in the afternoon, but support is likely to kick in at around 3,130 points.

 

Consumer price inflation in China sped to 5.4% in the year to March, the fastest since July 2008 and topping market forecasts for a 5.2% increase.

 

“The market remains cautious of further tightening policies from China and this will probably pressure the STI for the second half of the day,” said Ng Kian Teck, an analyst at SIAS Research.

 

“Companies with China exposure or operations, like Yanlord and Wilmar, were underperforming the market today. DBS, which has the largest exposure to China among the banks, also declined more than the STI,” he added.

 

By lunch break, shares of property developer Yanlord Land (YNLG.SI) were down 1.9%, palm oil firm Wilmar International (WLIL.SI) fell 0.8%, and DBS (DBSM.SI) declined 1%.