Commodities lead losses at midday; 3,100 support eyed

Singapore shares tumbled 1.2% by the midday on Wednesday, in line with other Asian bourses, as falling commodity prices spooked investors and caused a broad pullback in firms such as Wilmar International (WLIL.SI).

By the lunch break, the Straits Times Index (STI) <.FTSTI> was down 36.53 points at 3,117.04. The total value of shares traded in the morning session was $879.3 million, up from $682 million on Tuesday. Traders said they expect the index to find support at 3,100.

“Broadly, commodity firms have taken a beating due to concerns that commodity prices have risen too much and are due for some correction,” said a local trader.

 

Wilmar, the world's largest palm oil firm, fell 2% to $5.15 by the lunch break with over 3 million shares changing hands.

 

Shares of coal miner Straits Asia Resources (STRL.SI) plunged as much as 4.5%, as falling oil prices triggered investors to take profits, traders said.

 

Concerns that China may introduce further tightening measures to rein in inflation have also kept investors more risk averse.

 

“The market continues to trade cautiously owing to the many underlying uncertainties, particularly the possibility of further cooling measures from China and worries over the European sovereign debt crisis,” said Ng Kian Teck, an analyst at SIAS Research.

 

Keppel Corp (KPLM.SI), the world's largest oil rig builder, was also one of the worst-hit blue chip stocks, as lower oil prices have hurt sentiment for oil and gas companies.

 

At the midday break, Keppel shares were 2.1% lower at $11.46 with over 3.6 million shares changing hands.

 

Genting Singapore (GENS.SI), which owns one of the two casino resorts in the city-state, fell 2.4% after its rival Las Vegas Sands (LVS.N) reported disappointing quarterly profit at its casino in the city-state, Marina Bay Sands.