Singapore banks lead STI to fall 3.5% on Thursday

[SINGAPORE] Singapore stocks ended lower on Thursday (Oct 8), led by declines across the local banking trio.

The benchmark Straits Times Index (STI) lost 3.5 per cent or 195.48 points to finish at 5,412.96.

UOB was the worst performer among STI constituents, down 5.2 per cent or S$2.19 at S$40.25.

DBS lost 4.7 per cent or S$3.64 at S$73.85, and OCBC fell 4.3 per cent or S$1.30 to S$29.

The immediate pressure on the STI comes from two directions, said Charu Chanana, Saxo’s chief investment strategist.

Globally, rising bond yields are weighing on equity valuations, and make fixed-income investments more competitive against dividend-paying stocks in Singapore’s income-oriented market, she noted.

Locally, concerns about bank earnings have also accelerated profit-taking, which had a disproportionate impact on the STI given its heavy concentration in financials, she pointed out.

Nevertheless, the correction “needs to be put in perspective”.

The STI is still up 17 per cent year to date after the recent sell-off, meaning the market is giving back part of a substantial rally, rather than necessarily signalling a broad deterioration in Singapore’s fundamentals, she said.

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“Strong gains also mean valuations may have less room for disappointment, particularly if earnings expectations are being revised lower,” she added.

Meanwhile, Jardine Matheson led the gainers on Singapore’s blue-chip index, rising 1.1 per cent or US$0.64 to US$56.56.

Within the iEdge Singapore Next 50 Index, Top Glove was the top gainer, rising 3.8 per cent or S$0.01 to S$0.275.

First Resources was the biggest decliner, falling 6.1 per cent or S$0.28 to S$4.29.

Across the broader market, losers outnumber gainers 438 to 163, after 1.7 billion securities worth S$4.2 billion changed hands.

Clearbridge was the most actively traded stock with 135.3 million shares changing hands.

Key regional indices fell. Hong Kong’s Hang Seng Index lost 1.4 per cent, Japan’s Nikkei 225 fell 1.4 per cent, South Korea’s Kospi was down 2.6 per cent and the FTSE Bursa Malaysia KLCI declined 0.7 per cent.

This article was written with the assistance of AI and reviewed by a reporter