Singapore stocks dive on US inflation worries; STI tumbles 1.9%

THE Straits Times Index (STI) fell 1.9 per cent or 60.89 points to close at 3,165.18 on Thursday (May 12), as Asian markets tumbled on inflation fears following the release of US consumer price index (CPI) data.

“The much-awaited US CPI data revealed the first deceleration in consumer prices in 8 months. But with the descent coming in slower than expected, it has kept the US equity markets on edge,” said IG market strategist Yeap Jun Rong.

While dipping 0.2 percentage point from the previous month, headline US consumer prices rose 8.3 per cent year on year in April, remaining higher than market forecasts.

This raised hopes that the pace of price rises has peaked, but reaffirmed concerns that rates will need to rise quickly to tame inflation.

The result was a sea of red across key Asian markets. Hong Kong’s Hang Seng slid 2.2 per cent, Japan’s Nikkei 225 fell 1.8 per cent, South Korea’s Kospi dropped 1.6 per cent, and the FTSE Bursa Malaysia KLCI lost 1.1 per cent.

“For the STI, recent downward moves have driven an ongoing retest of an upward trendline in place since November 2020. Failure for the line to hold may suggest further downside to 3,100 next,” Yeap said.

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In the wider Singapore market, losers outnumbered gainers 418 to 149, after 2.09 billion securities worth S$1.99 billion changed hands.

The sole gainer on the blue-chip index on Thursday was SGX, which rose 1.2 per cent or S$0.11 to S$9.50.

At the bottom of the table was Yangzijiang Shipbuilding, which plunged 11 per cent or S$0.10 to end at S$0.81. The counter was also among the most actively traded counters, with 55.9 million shares traded.

Singtel kept its position as the most heavily traded constituent stock this week, falling 0.7 per cent or S$0.02 to close at S$2.81, after 89.3 million shares changed hands.

The trio of local banks all ended lower. DBS fell 2.7 per cent or S$0.86 to S$31.06, OCBC dropped 1 per cent or S$0.12 to S$11.70, while UOB lost 1.4 per cent or S$0.40 to S$28.08.