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Singapore shares fall at Monday open after Fed's emergency rate cut; STI down 2.8%

SINGAPORE shares started the week lower after the US Federal Reserve on Sunday cut interest rates to virtually zero as part of emergency measures to shore up confidence and keep the financial sector running.

The Straits Times Index (STI) lost 72.57 points or 2.8 per cent to 2,561.43 as at 9.05am.

Losers beat gainers 179 to 43, with 92.3 million securities worth S$175.7 million changing hands.

Among the most heavily traded counters by volume, Rex International lost 0.5 Singapore cent or 3.9 per cent to 12.4 cents after 6.7 million shares were traded.

Other actives included Singtel, which fell S$0.07 or 2.7 per cent to S$2.57 with 3.4 million shares traded, and shipping firm Marco Polo Marine, which dipped S$0.001 or 7.1 per cent to S$0.013 after 3.2 million shares changed hands.

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Meanwhile, CapitaLand Commercial Trust lost S$0.05 or 2.8 per cent to S$1.73.

All three local banks fell heavily in early trade. DBS was down S$0.37 or 1.9 per cent to S$18.98, OCBC lost S$0.17 or 1.9 per cent to S$8.90 while UOB tumbled S$0.53 or 2.6 per cent to S$19.61.

Elsewhere in Asia, Tokyo's Nikkei 225 index lost 0.68 per cent or 117.75 points to 17,313.30 in the first few minutes of trade while the broader Topix index was down 0.31 per cent or 3.87 points to 1,257.83.

Faced with a growing economic slump from the novel coronavirus pandemic, the Federal Reserve slashed the key interest rate to a range of 0-0.25 per cent, where it was during the 2008 global financial crisis. It pledged to keep rates at this level "until it is confident that the economy has weathered recent events".

It is the Fed's second emergency rate cut in less than two weeks.

The central bank also announced massive asset purchases, opened its discount-lending windows to banks and urged lenders to use them to help businesses and households.

In another move, it removed bank reserve requirements to allow them to use cash backstops.

Despite the measures, US stock index futures tumbled after resuming trading on Sunday.

US stocks had staged a rally in the final moments of Friday's session after US President Donald Trump declared a national emergency to combat the rapidly spreading novel coronavirus.

The Dow Jones Industrial Average rose 1,985 points or 9.36 per cent to 23,185.62, the S&P 500 gained 230.38 points or 9.29 per cent to 2,711.02 while the Nasdaq Composite put on 673.07 points or 9.35 per cent to 7,874.88.

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