Singapore Stocks-Down on economic concerns, may extend losses

(Economy news)SINGAPORE, Aug 12 - Singapore shares were down 0.96 percent in morning trade on Thursday, and may extend losses as Wall Street's overnight drop sent investors fleeing from equity markets amid renewed uncertainty over U.S. economic growth.

* Index down 0.96 pct at midday, to test 2,640 in next month

* Concern corporate earnings growth may slow in 2011

At the midday break, the Straits Times Index <.FTSTI> was down 28.17 points at 2,921.09 but slightly above its intraday low of 2,917.58.

"Fears of a double-dip recession are growing. The U.S. is still the largest consumer market in the world and if they see any double dip, exporters like Singapore and China won't do well either," said Carey Wong, an investment analyst with OCBC Securities.

He said he expected the STI to remain weak in the afternoon, and may see a slightly steeper correction in the next month to test 2,640.

"The market may be weary about the outlook for next year. Especially with the strong earnings from companies in 2010, it may be hard-pressed to match this performance," Wong said.

Singapore shares were dragged by telcom firms, as Singapore Telecommunications , Southeast Asia's largest telcom firm, fell 1.6 percent to S$3.01 after it posted worse-than-expected first quarter earning.

SingTel said its April-June underlying net profit was S$943 million, but analysts surveyed by Reuters had forecast an average net profit of S$982 million. [ID:nSGE67406B]

The FT Straits Times Telecommunications Index <.FTFSTAS6000> fell 1.6 percent, underperforming the broader index.

City Developments shares were down 2.2 percent at S$11.66, after its second quarter net profit rose 17.6 percent to S$164.6 million. But this was lower than the average of S$190 million from three analysts surveyed by Reuters. [ID:nSFK000017]

Shares of Singapore-listed Indonesian palm oil firm Golden Agri-Resources fell as much as 1.8 percent to over a two-week low of S$0.56 after brokers cut their target prices because of a more cautious second half outlook.