STI rebounds, albeit in lower volume
Analysts certain Fed will raise rates next week, amid growing consensus that there could be two more hikes afterwards
ALTHOUGH the Straits Times Index (STI) managed an 8.93-point rebound to 3,130.44 on Tuesday, most likely in tandem with a rise in the Dow futures and Hang Seng Index, perhaps the more important feature of trading was that volume amounted to 2.5 billion units worth only S$1.12 billion, a sharp drop from last week's S$1.5 billion daily average. Excluding warrants, there were 255 rises versus 198 falls.
Brokers suggested that traders had suddenly turned cautious ahead of next week's US Federal Open Market Committee meeting, at which an interest-rate hike is virtually certain. In the federal funds futures market, the implied probability of a 25 basis point rise in interest rates is now 96 per cent.
The average value per unit traded was S$0.45. Of the 20 most active stocks, 15 were priced below S$0.20. Most active was men's apparel retailer Vashion Group, formerly known as Startech Electronics. The stock rose S$0.001 to S$0.004 on volume of 127.6 million.
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