STI hit hard by China negativity

It regressed again below the psychological 3,000 level as China showed fresh signs of economic weakness.

China's purchasing manager's index disappointed with a solid contraction, suggesting slowing demand, which when paired with sluggish exports began triggering a fear-fueled 0.8% slide.

Here's more from IG Markets:

In Singapore today the STI was the region’s worst performer dropping 0.8% as worries over Chinese economic cool-down continued to plague local traders.

The STI ended the day down in the doldrums at 2979.3, as it slipped off a precipice in the last hour of trading.

True to form, China is the bad guy yet again in the global economic recovery as it fails to reassure the markets its economic slowdown is bottoming out. Forget soft or hard landing, some very pessimistic bears are talking about a crash landing.

Today’s disappointing news came courtesy of HSBC’s China PMI number. Early whispers were for a strong reading above 50, however this proved not to be the case as the number came in at 48.1; well below the previous month’s 49.6 reading. The number (below 50) is a contraction and confirms the fears cited by China bears.

China is experiencing both weakening domestic demand and sluggish export orders.

However, the bulls don’t see a hard landing in China because of the monetary easing that can be rolled out to support the economy. In fact, the button was pressed on monetary easing today to boost liquidity in rural areas with a cut in the reserve ratio for the Agricultural Bank of China.