Singapore stocks end Thursday flat, traders remain wary after Federal Reserve meeting

NEWS that Federal Reserve officials are looking to scale back policy support as the US economy recovers from the Covid-19 pandemic led to a wary and directionless trading session in Singapore on Thursday, as investors adopted a risk-off sentiment.

Fed chairman Jerome Powell said on Wednesday that officials had begun a discussion about scaling back bond purchases. They were also leaning towards two interest rate hikes by the end of 2023, based on median estimates.

"The Fed may have delivered a more hawkish message for markets than many would have expected," said IG market strategist Yeap Jun Rong. "Markets have been riding on (the) Fed's 'lower-for-longer' accommodative stance, with the recent Fed meeting outcome seemingly overturning this narrative."

However, he noted that markets are likely to start adjusting their expectations over the longer term in anticipation of the upcoming reduction in policy support.

The benchmark Straits Times Index ended the day flat, rising only by a marginal 0.04 per cent or 1.26 points to 3,138.31. Across the broader market, decliners outpaced advancers 270 to 210, after 1.68 billion securities worth S$1.22 billion changed hands.

Across the region, markets mostly ended the day in the red as investor optimism waned. The Nikkei 225 fell 0.9 per cent; the Kospi lost 0.4 per cent, while the KLCI shed 0.5 per cent. The Hang Seng Index, however, rose 0.4 per cent.

On the local bourse, Jardine Matheson Holdings was the top advancer of the day. The counter closed at US$62.84, up 0.6 per cent or US$0.38. Another member of the Jardine group of companies, C07 e, was also among the top gainers, rising 1.2 per cent or S$0.25 to S$21.85.

After being among the biggest decliners on Wednesday, C6L rose 1.4 per cent or S$0.07 on Thursday to close at S$4.99.

Banks were among the notable decliners on Thursday, as threats of higher interest rates loomed over investors. G07 was the biggest loser, falling 0.6 per cent or S$0.13 to S$22.56.

The trio of local lenders also ended Thursday in the red. U11fell 0.4 per cent or S$0.11 to S$25.94; O39declined 0.7 per cent or S$0.08 to S$12.12, while D05 inched down 0.1 per cent or S$0.02 to S$29.90.

5WH was the most heavily traded counter for the day, with some 101.1 million shares changing hands. The stock closed at 18.9 Singapore cents, down 0.5 per cent or 0.1 cent.

Other actively traded stocks included 5LY, THFR and BS6 .