Shares down at midday on weak China, US data

Singapore shares sank 0.7% by the midday break on Monday, in line with other Asian bourses, as a string of weak economic data from China and the United States renewed concerns over global growth and dented investor confidence.

Around 12:50 pm, the Straits Times Index (STI) <.FTSTI> was down 22.09 points at 3,129.19. The total value of shares traded in the morning session was $541.5 million, down from $798.9 million at the midday break on Friday.

“The STI is down largely due to disappointing U.S. employment figures and higher-than-expected CPI figures from China,” said Ng Kian Teck, an analyst at SIAS Research.  

 

“Inflation will continue to be a pressing issue and the concern is that the Chinese authorities have failed to implement holistic measures to fight inflation. The market is likely to react negatively to another round of money supply tightening.”

 

Ng said he expects the STI to trend downwards with 3,100 points as the key support level. Investors will be keeping a close watch on key data from the U.S. this week such as retail sales, inflation and industrial production data, he added.

 

The United States released non-farm payrolls data on Friday, which showed the economy created only 18,000 jobs in June, well short of an expected 90,000, dashing optimism that the economy was emerging from a soft patch.

Meanwhile, data on Saturday showed annual inflation in China accelerated to a three-year high in June with the consumer price index up 6.4% from a year earlier, slightly above analyst expectations.

 

Shares of offshore vessel builder STX OSV (STXO.SI) rose as much as 4.9% to its record high after it said its substantial shareholder has agreed to sell part of its stake to funds linked to U.S.-based Oz Management LP. 

 

“We believe the overhang risk has been cleared by the placement and believe the share price could continue to re-rate on improving demand for high-end offshore support vessels,” said DMG & Partners in a report.

 

Chinese candies and pastries group Hsu Fu Chi International (HSFU.SI) rose 8.6% by the midday to $4.35 after it said Nestle (NESN.VX) had offered to buy 60% of the firm. 

 

Singapore-listed Chinese wastewater treatment firm Renewable Energy Asia (REAG.SI) plunged 15.5% to $0.06, weighed by continuing concerns about the firm after it said last week its listing sponsor had resigned.