STI down 1.2% on surprise monetary tightening

SINGAPORE stocks extended losses into Thursday (July 14) on yet another off-cycle monetary tightening move this year, with the city state having recorded slower-than-expected economic growth.

The Straits Times Index (STI) tumbled 1.2 per cent or 38.06 points to 3,090.63 at the closing bell.

Losers beat gainers 297 to 180 in the broader market, with 987.7 million securities worth S$935.4 million changing hands.

In an unscheduled tightening move, the Monetary Authority of Singapore (MAS) upped its full-year inflation forecast for 2022, on the back of expectation that overall inflationary pressures “will remain elevated in the months ahead”.

Regional indices delivered a mixed response to the grim US inflation report late Wednesday, in which consumer prices surged to a 40-year high of 9.1 per cent. 

The Shenzhen component index was up 0.75 per cent, the Jakarta Composite Index closed 0.72 per cent higher, while the Japan’s Nikkei index and Kuala Lumpur Composite Index each climbed 0.62 per cent.

Hong Kong’s Hang Seng Index, however, slipped 0.22 per cent and South Korea’s benchmark Kospi fell 0.27 per cent.

Oanda’s senior market analyst, Jeffrey Halley, said Asian equities were “treading water” following the lack of panic on Wall Street overnight, despite the headline inflation numbers. Still, the market can expect further tightening moves in the coming days as other monetary authorities in the region take aim at inflation, he said.

 The Philippine central bank on Thursday also raised its key interest rate 75 basis points in a surprise move.

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All but 4 of the 30 STI components were in the red, with pan-Asian retailer DFI Retail Group at the bottom of the table. The counter shed 3.3 per cent or US$0.10 to close at US$2.89.

The local banking trio fell further. OCBC sank 1.4 per cent or S$0.16 to S$11.25, UOB lost 1.18 per cent or S$0.31 to close at S$26.05, and DBS fell 1.13 per cent or S$0.34 to S$29.80.

Genting Singapore was at the top of the table and 1 of the only 2 STI gainers. (Two other counters finished flat.) The counter climbed 2.7 per cent or S$0.02 to close at S$0.75. It was also the most actively traded counter by volume on the index, with 31.7 million securities worth S$23.6 million changing hands throughout the day.