Singapore stocks slide as Iran ceasefire wavers, Fed rate hike fears grow

[SINGAPORE] Singapore equities were a sea of red on Thursday (Jun 4) morning after hostilities in the Middle East flared again, further weakening the shaky ceasefire in the region.

The Straits Times Index was down about 1 per cent within the first 20 minutes of trading at about 5,086 points. DBS led the decline, with a loss of S$0.81 per share, translating into a 1.3 per cent drop that erased S$2.3 billion in its market capitalisation.

The Iranian attacks damaged Kuwait’s airport and injured dozens as the US military struck near the Strait of Hormuz, sending oil prices rising about 2 per cent on Wednesday.

Wall Street stocks retreated from record highs on Wednesday. This came as the three major US stock indexes closed in negative territory due to inflation fears and rising oil prices.

On Thursday, Federal Reserve Bank of Dallas president Lorie Logan said that US officials may need to raise interest rates later this year to bring inflation to the 2 per cent target.

This followed Federal Reserve Bank of New York president John Williams on Wednesday stating that the US monetary policy is well positioned for now, with no obvious direction for the future path of interest rates.

As at 9.40 am in Singapore, Japan’s Topix fell 1.3 per cent and the Nikkei 225 was down about 1.8 per cent. South Korea’s Kospi took a 2.1 per cent hit and Australia’s ASX was down about 1.3 per cent.

In Hong Kong, the Hang Seng Index fell 0.8 per cent, while Shanghai’s Shenzhen CSI 300 was down 0.4 per cent.

Stocks of oil-producer Malaysia bucked the trend, however, with the KLCI inching up about 0.2 per cent.

SEE ALSO

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Lebanon and Israel on Wednesday agreed to a ceasefire, according to a joint statement with the US released by the US State Department.

This came as the US House on Wednesday voted to force US President Donald Trump to withdraw US forces from the war or secure approval from the US Congress to continue fighting.