Singapore shares mirror Asian indices on Wednesday; STI up 0.2%

THE Straits Times Index (STI) settled higher on Wednesday (Mar 5), mirroring regional indices.

The STI closed up 0.2 per cent or 7.64 points at 3,898.40.

The trio of local banks ended mixed, with DBS rising 0.2 per cent or S$0.09 to S$45.62. OCBC finished flat at S$17.17, while UOB was down 0.1 per cent or S$0.04 at S$38.16.

The top gainer was Yangzijiang Shipbuilding , increasing 3 per cent or S$0.07 to S$2.41.

The biggest loser was DFI Retail Group , shedding 1.9 per cent or US$0.04 to US$2.10.

Across the broader market, advancers outnumbered decliners 338 to 205, after 1.5 billion shares worth S$1.4 billion changed hands.

Meanwhile, across the region, major indices closed higher. The Kospi rose 1.2 per cent and the Nikkei 225 added 0.2 per cent.

Hong Kong’s Hang Seng Index ticked up 2.8 per cent, and the Bursa Malaysia Kuala Lumpur Composite Index edged 0.6 per cent higher.

Trade tensions continue to weigh on the earnings outlook for US stocks, with investors now favouring Treasury bills, lumber and gold, said Jose Torres, senior economist at Interactive Brokers.

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The yield curve bull-steepening as softening economic conditions and rising uncertainty prompt a quicker shift in monetary policy, he added.

“Elevated equity volatility levels also coincide with traders scooping up long puts as insurance in case stocks continue declining.”

A big risk with the US “trade reset” is that physical goods become unaffordable for American families. Coupled with government spending reductions, this is driving investors’ fear of a potential recession, he noted.

“Consumer spending exhaustion and government expenditure reductions are worse for equities than inflation, as the former forces weigh on earnings momentum.”