Singapore enters bear market, Asian shares mostly lower

Singapore enters bear market, Asian shares mostly lower

28 September 2015, 09:03

On Monday Singapore’s FTSE Straits Times Index was down 1.6%, putting the index in bear market territory — defined as a 20% fall from a recent peak.

Stocks in Singapore, a commodities-trading hub, have come under pressure amid signals of China’s dipping economy and weak business climate, which have hurt commodities prices.

Earlier Monday, the world's second largest economy reported its August industrial profits fell 8.8% from a year earlier.

Singapore-listed firms that focus on offshore marine engineering and commodities led the declines, with SembCorp Marine down 3.4% and Noble Group shedding 2.2%.

Elsewhere in Asia, the Nikkei 225 Stock Average was down 1.32% and the Shanghai Composite added 0.27%, while Australia's S&P ASX 200 was up 1.35%.

In Japan, some investors are reestimating how realistic expectations of additional monetary easing by the Bank of Japan would be, which contributed to selling in Tokyo, said Soichiro Monji, general manager of economic research at Daiwa SB Investments.

On Friday Japanese shares rose 1.8%, partly driven by hopes of more monetary easing after Bank of Japan Governor Haruhiko Kuroda met with Prime Minister Shinzo Abe at the prime minister’s residence early that afternoon to discuss the economy.

Abe also said during a news conference after the market closed Friday that he wasn’t considering an immediate stimulus package.

The Japanese economy is shrinking, prompting some economists to question whether the “Abenomics” growth program is at risk of failing. On Thursday Abe said that he would aim to increase the size of the economy by around a fifth, without specifying exactly how or when that would be accomplished. Economists were skeptical.

Meanwhile, many investors see a buying opportunity in Tokyo, where corporate earnings are at record highs.

The Nikkei is near a bottom and a drop in commodity prices will provide “significant merits” to the economy in the longer term, said Masayuki Kubota, chief strategist at Rakuten Securities.

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