THE rally fuelled by the US Federal Reserve’s commitment to cut rates did not carry over from Thursday (Mar 21), causing Singapore shares to close little changed on Friday despite an overnight rally in the US and European markets.

The Straits Times Index dipped 0.07 per cent or 2.4 points to 3,217.97 for the day, but fared better for the week with a 1.4 per cent or 45.01 point increase.

Of the three counters contributing to over 40 per cent of the market barometer, DBS : D05 0% was the one banking stock that rose, by 0.5 per cent or S$0.17 to S$35.83. In contrast, OCBC : O39 0% declined 0.3 per cent or S$0.04 to S$13.60 and UOB : U11 0% fell 0.5 per cent or S$0.15 to S$29.07.

Singapore banks’ earnings momentum is set to lose steam this year amid rising funding costs and a drag from possible rate cuts, S&P Global Market Intelligence said in a recent commentary.

Stephen Innes of SPI Asset Management pointed out that the US economic data released on Thursday bolstered the argument that the Federal Reserve may need to reconsider its forecasts for interest rate reductions.

“Just a day after the central bank signalled three 25-basis-point cuts in 2024, housing, manufacturing, and labour market data from the US indicated a resilient economy. This could potentially lead the Fed to implement interest rate cuts slower than the market anticipates,” commented Innes.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Decliners beat gainers 301 to 250 across the broader market as 1.5 billion securities worth S$1 billion were transacted.