Singapore stocks fall amid uncertainty over Asian central bank rate decisions; STI down 0.1%
Yong Jun Yuan
SINGAPORE shares fell on Monday (Dec 18) as investors grappled with uncertainty over rate expectations in Japan and China.
The benchmark Straits Times Index (STI) fell 0.1 per cent or 3.28 points to 3,113.23. Across the broader market, losers beat gainers 309 to 256, after 1.4 billion securities worth S$1 billion changed hands.
Regional indices were mixed. Hong Kong’s Hang Seng Index shed 1 per cent, Japan’s Nikkei 225 fell 0.6 per cent while South Korea’s Kospi Composite Index gained 0.1 per cent.
SPI Asset Management managing partner Stephen Innes said that Asia’s two major central banks appear to be moving in different directions, something that is contributing to market uncertainty.
“The Bank of Japan is contemplating raising rates, while the People’s Bank of China seems inclined to ease policy to combat deflation and support sluggish growth. The lack of clarity on both policy fronts is causing some discord in Asian markets today,” he said.
Still, Innes noted that interest rate futures markets continue to price for 150 basis points of rate cuts from the US Federal Reserve next year. The decline in bond yields and the US dollar is expected to underpin risk assets throughout the week, he added.
On the STI, Venture Corporation was the top gainer, rising 2.6 per cent or S$0.34 to S$13.24.
Meanwhile, DFI Retail Group came in at the bottom of the table. It shed 5.1 per cent or US$0.12 to US$2.23.
The trio of local banks were mixed on Monday. DBS gained 1.4 per cent or S$0.44 to S$31.50, OCBC rose 1.1 per cent or S$0.13 to S$12.50, while UOB shed 0.3 per cent or S$0.08 to S$27.74.
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