STI falls 0.4% as regional rally runs out of steam

SINGAPORE shares extended its losses on Thursday as the recent equities rally in the region ran out of steam amid some caution although analysts said trading sentiments remain largely buoyant.

The key Straits Times Index finished at 2,908.85 after retreating 11.58 points or 0.40 per cent.

Most major Asian markets including Japan, Hong Kong, South Korea and Malaysia tracked lower as well, following an uninspiring overnight session in Wall Street. This despite "astonishingly" upbeat retail sales data out of the US. China returned from its week-long Chinese New Year break with the key gauge posting gains.

"The combination of robust economic recovery expectations backed by loose monetary policies and supportive fiscal measures should point to further gains in risk assets. But one factor seems to be spoiling the party - rising (US) bond yields," said FXTM market analyst Han Tan.

"The recent rally seen in yields reflects mainly two things. One is we are finally beating the virus, and hence we are headed for strong economic activity. The second part, which worries many investors, is that inflation may return at a faster pace than previously anticipated." He added that investors need to keep a close eye on how long-term yields behave going forward.

On the local bourse, turnover came in at 3.11 billion units worth S$1.26 billion. Among the STI constituents, 18 counters were down while eight counters finished up.

Sembcorp Marine fell 0.7 Singapore cent or 4.4 per cent to 15.2 Singapore cents. The counter was the day's fifth most actively traded with 99 million shares worth S$15.1 million done. The offshore & marine firm said it will make material provisions in light of an "adverse impact" on its performance for the final quarter ended December and the full year. Its report card is set to be released next Tuesday.

Thai Beverage slipped one Singapore cent or 1.3 per cent to 75.5 Singapore cents. OCBC Investment Research issued a "buy" on the stock, and raised its fair value estimate from 89 Singapore cents to 91 Singapore cents. The house said it expects the company's proposed listing of BeerCo to help unlock value and pare down debt.