Hot stock: STI down 1% after US Fed decisions

SINGAPORE shares and the Singapore dollar took a hit on Thursday morning after the US Federal Reserve announced rate hikes and signalled there would be more next year.

As at 11.59am, the benchmark Straits Times Index fell by 0.99 per cent, or 29.19 points, to 2,924.87.

Losers beat gainers 252 to 107, or about seven down for every three up. Some 1.01 billion shares worth S$445.8 million changed hands.

The three local banks chalked up some of the biggest losses. DBS fell by 19 Singapore cents to S$17.77. UOB was down 35 cents to S$20.85, and OCBC lower by 11 cents to S$9.13. SingTel and Keppel Corporation rounded up the top five.

The Singapore dollar took an early hit as it weakened to 1.4434 to the US dollar as at 8.15am, about 0.44 per cent lower from previous close, but soon recovered. It was at 1.4370 to the US dollar as at 11.58am.

This came after the US Fed rose rates on Wednesday in the US by 25 basis points, the second time in a decade, amid signs that the US economy was picking up. The decision to raise rates was unanimous within the Federal Open Market Committee.

The Fed also said it now thinks three increases in 2017 are likely, compared to two increases mentioned in September.