Asia stocks extend losses on fears over Fed rate hike, Ukraine tensions; STI down 1%

CONCERNS over the Federal Reserve's imminent rate hike and fears over Russia's troop build-up at the Ukrainian border drove Asian equity markets further into the red at the closing bell on Tuesday (Jan 25).

The Straits Times Index (STI) shed 1.1 per cent or 35.59 points to close at 3,247.76. Advancers trailed decliners 145 to 371 in the broader Singapore market, with 1.55 billion securities worth S$1.53 billion changing hands.

Shares in South Korea performed the worst in the region, with the benchmark Kospi diving 2.6 per cent, the biggest daily drop in 11 months. Japan's Nikkei 225 ended down 1.7 per cent, a 5-month low.

Hong Kong's Hang Seng sank 1.7 per cent, while the Kuala Lumpur Composite Index lost 0.9 per cent.

Analysts from Phillip Securities Research said the prospect of a Fed interest rate hiking cycle and balance-sheet reduction to tackle inflation is rattling markets. Escalating US-Russia tensions over Ukraine have also dampened risk appetite.

STI constituents mostly ended in a sea of red, except Jardine Matheson Holdings J36, which climbed 0.8 per cent or US$0.50 to US$59.80. Meanwhile, Yangzijiang Shipbuilding BS6 was the top loser among index constituents, falling 4.5 per cent or S$0.06 to S$1.26.

All 3 local banks posted losses. DBS D05 fell 1.3 per cent or S$0.46 to S$35.20, OCBC O39 shed 1.2 per cent or S$0.15 to S$12.15, while UOB U11 lost 0.9 per cent or S$0.28 to end at S$29.73.

Shares of digital safety company DiSa 532 were the most actively traded by volume, with 302 million shares worth S$2.2 million changing hands. The counter closed down 12.5 per cent or S$0.001 at S$0.007.