Singapore stocks fall on Friday as local banks take a hit; STI down 0.5%

[SINGAPORE] Singapore stocks ended lower on Friday (Jul 17), amid the city-state’s three banks experiencing declines in the day’s session.

The benchmark Straits Times Index (STI) lost 0.5 per cent or 29.95 points to finish at 5,509.43. Across the broader market, losers outnumbered gainers 365 to 226, after 1.2 billion securities worth S$2.1 billion changed hands.

UOB led the losses among the local banks, and was down by as much as 3.8 per cent in intraday trading. The counter closed 2.4 per cent or S$1.03 lower at S$42.47.

DBS lost 0.7 per cent or S$0.52 to S$71.96, while OCBC shares fell 0.8 per cent or S$0.22 to S$28.56.

A Citigroup note stated how the market was “overly optimistic” in pricing in an asset quality turnaround for UOB in particular, reported The Business Times.

Tan Yong Hong, a Citi analyst, also said that UOB earnings could miss expectations when excluding one-off income, while second-quarter earnings for DBS and OCBC are expected to be slightly above expectations.

Thai Beverage led the gainers on Singapore’s blue-chip index, rising 3.4 per cent or S$0.015 to end at S$0.455.

The worst performer among STI constituents was ST Engineering , which lost 2.5 per cent or S$0.27 to close at S$10.43.

Within the iEdge Singapore Next 50 Index, Lendlease Global Commercial Reit was the top gainer, rising 0.9 per cent or S$0.005 to finish at S$0.575.

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AEM was the top loser, falling 5.8 per cent or S$0.53 to end the session at S$8.64.

Key regional indices were mixed. Hong Kong’s Hang Seng Index lost 1.8 per cent, Japan’s Nikkei 225 index fell 4 per cent and the FTSE Bursa Malaysia KLCI was up 0.5 per cent.

Analysts said elevated market volatility can be expected in the weeks ahead, particularly amid a war in the Middle East, with tensions abound, and the possibility of an imminent Fed rate hike.

Ipek Ozkardeskaya, senior analyst at Swissquote, flagged how traffic through the Strait of Hormuz has fallen to wartime levels, with “no easy resolution in sight”, on top of how the weekend could bring further escalation.

That said, recession risk remains low at the current time, which could help contain market weakness, said Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management.

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