STI closes flat, up 0.1% on inflation watch

THE Singapore stock market’s key index vacillated between being under and above water for much of trading on Monday (Jan 8). In the end, it finished flat ahead of the week’s key inflation data out of China, Japan and the US.

The Straits Times Index ended marginally higher by 2.72 points or 0.1 per cent at 3,187.02. Elsewhere, most key gauges across Asia from Hong Kong and China to South Korea and Australia were in the red while Taiwan bucked the trend to finish higher. Markets in Japan were closed for a holiday.

Monday’s showing followed last Friday’s marginal gains in Wall Street, which capped its worst decline since Halloween.

Last week – the new year’s first trading week – marked one of the weakest starts to the year for global equities.

Recent US data on jobs have provided a mixed picture of the economic path ahead, which in turn has raised doubts on the trajectory of the Federal Reserve’s rate cuts for the year. For this reason, this Thursday’s inflation figures from the world’s largest economy will be closely watched.

“It overall remains unclear at this point if the US economy can see a soft landing, hard landing or still too strong a growth. The futures market is calling for a two-thirds chance of a cut in March, which is some reflection of the potential pressure for the Fed to act soon in light of more cool-down in the economy,” said Maybank analysts in a recent note.

Fears over continuing macroeconomic instability exacerbated by oil edging higher on the back of continued tensions in the Middle East further hurt trading sentiments. US-Sino tensions were also another area of concern, particularly with Taiwan’s looming elections.

On the home front and across the broader market, some one billion securities worth S$752 million were traded. Losers outnumbered gainers with 314 counters down and 246 up.

OCBC retreated S$0.01 or 0.1 per cent to S$12.80. The bank is RHB Research’s preferred pick among Singapore banks given its “strongest asset quality metrics”, which is a potential differentiating factor if interest rates stay higher for longer.

SEE ALSO

Singapore shares rise on Monday, tracking Wall Street gains; STI up 0.8%

Stocks to watch: Keppel, First Resources, Yanlord, AA Reit

ComfortDelgro inched up S$0.01 or 0.7 per cent to S$1.43. Maybank Kim Eng viewed the transport operator’s move to raise taxi booking commissions effective the start of this year positively, despite competition from peers and its acquisition of an Australian taxi operator. The research house retained a “buy” on the counter with a higher discounted cash flow target price of S$1.60.