STI down 0.6% as Asian equities slide on hawkish Fed comments

SINGAPORE stocks slumped, as did other Asian equities, on Wednesday (Apr 6), as investors grappled with the possibility of aggressive monetary tightening by the US Federal Reserve while awaiting greater clarity on sanctions to be imposed on Russia.

The benchmark Straits Times Index (STI) fell 0.6 per cent or 22.06 points to 3,422.95, while major indexes in Hong Kong, Japan, South Korea and Australia closed down 1.9 per cent, 1.6 per cent, 0.9 per cent and 0.5 per cent respectively.

IG market strategist Yeap Jun Rong said the markets were reacting to comments of Fed governor Lael Brainard, which were perceived to carry a hawkish tone. Brainard had mentioned that the US central bank could start to reduce its balance sheet as soon as May and would be doing it "considerably more rapidly" than in the previous recovery.

"Coming from a Fed member who normally favours loose policy, her support for a quicker pace of tightening seems clear in pushing the Fed's overall policy outlook towards the aggressive end," Yeap said.

On the local bourse, losers outnumbered gainers 269 to 201, with 1.39 billion shares worth S$1.21 billion changing hands.

Indonesian coal company Resources Global Development QSD was the biggest gainer on Wednesday, adding 121 per cent or S$0.49 to S$0.895.

Sembcorp Marine S51 was once again the most actively traded counter, closing flat at S$0.10 after 109.9 million shares worth S$11 million changed hands.

Among STI constituents, Jardine Matheson Holdings J36 was the top performer, closing 0.5 per cent or US$0.31 higher at US$57.17. At the bottom of the table was Frasers Logistics & Commercial Trust BUOU , which shed 3.4 per cent or S$0.05 to close at S$1.44.

The 3 local banks lost between 0.3 and 0.7 per cent.