STI dips 1.8%, falls below 3,000 to 20-month low

SINGAPORE stocks closed below the 3,000 level on Friday (Oct 21) for the first time since March 2021, amid recession fears with the US Federal Reserve seemingly persistent in its aggressive rate hikes.

The Straits Times Index (STI) fell 1.8 per cent or 52.75 points to close at 2,969.95, its lowest closing level since February 2021.

Losers outnumbered gainers 316 to 193, with 1.3 billion securities worth S$1 billion changing hands in the day.

Most STI counters ended in the red on Friday, with just Emperador gaining 1 per cent to close at S$0.49, and Yangzijiang Shipbuilding climbing 0.8 per cent to close at S$1.22.

Real estate investment trusts led the decline on the STI. The biggest loser was Mapletree Pan Asia Commercial Trust , which lost 6.1 per cent to S$1.55 at the close.

This was followed by Mapletree Logistics Trust , which fell 4 per cent to close at S$1.43.

The trio of local banks also ended lower on Friday. DBS was down 0.9 per cent to S$32.39, UOB fell 0.7 per cent to S$25.99, while OCBC closed 1 per cent lower at S$11.53.

Key markets elsewhere in Asia saw mixed trading. The Nikkei 225 Index and the Hang Seng Index were both down 0.4 per cent. The SSE Composite Index gained 0.1 per cent while the FTSE Bursa Malaysia Index was up 0.6 per cent.

Stephen Innes, managing partner at SPI Asset Management, said: ”US equities are tormented into the weekend by Federal Reserve officials reigniting fears of stricter monetary tightening and the possibility of a worldwide recession.”

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He noted that US Treasury yields continued to make new cycle highs across the curve, with the 10-year yields through 4.25 per cent for the first time since 2008.

Innes added: “Asia stocks are lower in conjunction with the above, and worries about China’s pandemic rules continued to weigh on regional investor sentiment amid additional lockdowns.”