Singapore shares fell at midday on Friday due to worries about disappointing U.S. earnings and possible tightening measures by the Chinese government, and traders said they expect more downside.

Asian stocks slipped because of concerns that rising inflation may invite aggressive policy action and hurt growth in the world's engines like China and India. U.S. shares also fell overnight on lackluster tech and materials earnings.

 

By the midday break, the Straits Times Index (STI) <.FTSTI> was down 0.24%, or 7.60 points, at 3,197.88. The total value of shares traded in the morning session was $789.8 million, down from $1.1 billion on Thursday.

 

Blue-chips were mostly down with financials such as Oversea-Chinese Banking Corp (OCBC.SI) down 0.7% and commodities firm also weak with Noble (NOBG.SI) off 1.3%.

 

Some local traders said more downside is on the cards as the key psychological level of 3,200 points had been crossed, but others said the STI may rise in the afternoon as the sell-off on Thursday was already significant.

 

“The market is at an inflection point. So far the U.S. earnings that we have seen have been rather poor...and China tightening fears are like a double whammy,” said Tey Tze Ming, a market strategist at Saxo Capital Markets.

 

“The selling seems to be rather broad-based - there is a risk-off kind of play,” he said.

 

Shares of Raffles Education (RLSE.SI), a Singapore education services provider, outperformed the broader market. They rose as much as 7.8% after BNP Paribas said the firm has identified a partner to co-develop a property it owns in China.

 

At midday, Raffles Education shares were up 4.7% at $0.335 on a volume of 37.8 million shares.