Banks lead decline in Singapore shares on Thursday amid slowing rate hikes
Tan Nai Lun
SINGAPORE shares fell on Thursday (Feb 2), led by declines in the trio of local banks.
The Straits Times Index lost 0.4 per cent or 13.97 points to stand at 3,363.68. Gainers outnumbered losers 333 to 225, after 1.6 billion securities worth S$1.3 billion changed hands.
The US concluded its latest Federal Open Market Committee (FOMC) meeting with a 25-basis-point rate hike.
While the three local banks’ net-interest margins have gained from higher borrowing costs due to the interest-rate hikes, they were in red for the day amid market expectations that the Federal Reserve would soon end its hiking cycle.
Stephen Innes, managing partner at SPI Asset Management, noted that Fed chair Jerome Powell delivered a slightly less hawkish assessment of financial conditions and acknowledged that the disinflation process had started.
He said: “It always makes for an exciting day when the market goes off the races due to what the Fed did not say, rather than what the Fed said.”
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Trading in the regional markets was mixed. The Nikkei 225 Index rose 0.2 per cent, the Kospi Composite Index gained 0.8 per cent and the FTSE Bursa Malaysia Index was up 0.3 per cent. The Hang Seng Index fell 0.5 per cent.
On the STI, DBS was the biggest loser, shedding 2 per cent to close at S$35.08. OCBC fell 0.8 per cent to S$12.88, while UOB lost 0.3 per cent to stand at S$29.63.
Meanwhile, the real estate investment trusts (Reits) gained after the FOMC meeting. Reits have been down over the past few months as their returns took hits from rising interest rates.
Among the STI counters, CapitaLand Ascendas Reit gained 1.4 per cent to finish at S$2.94, while Mapletree Pan Asia Commercial Trust rose 1.1 per cent to S$1.82.
The top gainer on the STI was Sats , which rose 4 per cent to close at S$3.15.
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