Singapore shares end weaker as traders grapple with US rate outlook

THE Straits Times Index (STI) on Thursday underwent a volatile session as traders struggled to come to grips with the US Federal Reserve's latest statement and dot plots, the former suggesting a December interest rate hike, while the latter suggested only two instead of three rate hikes next year.

By the end of trading, the STI was a net 4.68 points weaker at 2,846.06, with the whole market generating only 1.07 billion units worth S$754.2 million in turnover, the lowest for the week to date in both unit and dollar terms.

Of the dollar value, S$500 million or 66 per cent was done in the 30 index components and excluding warrants, there were 199 rises versus 148 falls.

An early bounce first took the STI up 26 points to an intraday high of 2,876 and was in line with a triple-digit surge in the Hang Seng Index. Once the Dow futures shifted into the red however, prices in Hong Kong also reversed, with the local market following suit. A firm opening for Europe and a mild recovery in the Dow futures ensured that Hong Kong closed in the black, albeit only marginally.

On Wednesday, the US Fed kept interest rates unchanged but the key phrase in its statement was that "the Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives".