July 21, 2011 / 5:31 AM / 9 years ago

Singapore Stocks-Slightly lower at midday; Tiger Airways falls

* Index 0.05 pct lower; support of 3,100 pts eyed

* Tiger falls following sharp spike on Wednesday

* IT products distributor ECS up on strong Apple sales

By Eveline Danubrata

SINGAPORE, July 21 (Reuters) - Singapore shares edged lower at midday on Thursday as a contraction in China’s factory sector in July as well as lingering concerns about fiscal woes in Europe weighed on sentiment.

By the lunch break, the Straits Times Index (STI) was down 0.05 percent, or 1.53 points, at 3,125.00. The total value of shares traded in the morning session was S$667.4 million, around 28 percent lower than S$926 million on Wednesday.

Local traders said based on technical indicators, support in the afternoon may kick in at around 3,100 points.

Among big-cap stocks that fell was Singapore property developer CapitaLand , which retreated 1.4 percent at S$2.85 on a volume of 11.2 million shares.

“The STI fell in the morning largely due to profit taking as well as weak China flash PMI reading,” said Liu Jinshu, an analyst at SIAS Research.

“CapitaLand continues to be weighed down by negative sentiment against developers with heavy exposure to the China market,” he added.

China’s factory sector contracted for the first time in a year in July and at its fastest pace since March 2009, a purchasing managers’ survey showed on Thursday, as monetary policy tightening and slack global demand weighed on the economy.

Shares of Singapore budget carrier Tiger Airways fell in the morning session, after shooting up on Wednesday on heavy volumes with most gains coming in the last hour of trading.

Traders said there was speculation that a fund had bought the stock. The market may also have punted that Singapore Airlines was going to raise its stake in Tiger.

Tiger responded late on Wednesday to a query from the Singapore Exchange that it engages in talks from time to time with various parties, but has not made a decision to pursue any of the initiatives.

By the break, Tiger shares were 3.1 percent lower at S$1.10 apiece with 25.6 million shares changing hands, around 5.8 times the average daily volume so far this year.

“The big spike up yesterday was probably because an investor believed CASA (Australia’s Civil Aviation Safety Authority) is about to let them fly again soon,” said John Rachmat, an analyst at RBS.

“But this view may not be shared by the rest of the market and hence the stock price corrected this morning,” he added.

However, Singapore’s ECS Holdings , which distributes iPads and iPhones in China, surged as much as 7.5 percent on upbeat sentiment after Apple recorded blockbuster sales.

At midday, ECS shares were trading at S$0.785 on a volume of 1.3 million shares, more than seven times the average daily volume so far this year. (Reporting by Eveline Danubrata)

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