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Asian markets fall amid China, Europe fears

Publication Date : 09-10-2012


Stocks fell across the region yesterday on renewed fears over Europe's debt troubles, with investors especially jittery about the prospect of Spain seeking a bailout.

Fears over China's economy also added to the pessimism after the World Bank cut its growth forecast for the country.

All this overshadowed better- than-expected job data from the United States last Friday.

"Investors in this part of the world haven't bought into the optimism shown by European investors on Friday," said Dr Adrian Foster, Rabobank's Asia-Pacific head of financial markets research. "Rather, most bourses are lower around the region but by less than 1 per cent. Chinese markets are open for the first time in a week and have just tracked the regional theme rather than producing anything exciting."

Shares were down 0.56 per cent in Shanghai and 0.53 per cent in Shenzhen.

Hong Kong's Hang Seng Index slid 0.89 per cent while Seoul's Kospi Index lost 0.67 per cent. Stock markets in Japan were closed for a holiday.

Beyond the regional factors, the Singapore bourse was also dragged down by property measures announced last Friday which introduced new curbs on the length of home loans.

The Straits Times Index (STI) fell 31.22 points, or 1 per cent, to 3,076.65.

Real estate developers - both inside and outside the blue-chip STI - were hit on fears that sales volumes and prices could be affected.

CapitaLand shed 11 cents, or 3.3 per cent, to S$3.19 in its biggest loss in almost five months. City Developments fell 28 cents, or 2.3 per cent, to S$11.67; Wing Tai Holdings slid three cents, or 1.7 per cent, to $1.685 and SC Global Developments tumbled six cents, or 4.9 per cent, to S$1.175.

Banks were also lower, on fears that the curbs could hit the home loans business.

DBS Group Holdings shed 21 cents, or 1.5 per cent, to S$14.25; United Overseas Bank was behind by 26 cents, or 1.3 per cent, to S$19.58 and OCBC Bank lost four cents, or 0.4 per cent, to S$9.45.

Analysts said the measures should not impact the market much.

"Although property transaction volumes in the near term would be impacted, we think that prices will continue to remain sticky in the time being, given the still-low borrowing cost and stable employment outlook in Singapore," said UOB Economic Treasury Research.

Kreuz Holdings lost two cents, or 4.5 per cent, to 42 cents. Yesterday was its first day on the mainboard after being transferred from the Catalist board.


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