STI falls 0.49% ahead of key meeting of the US central bank

SINGAPORE shares fell on Wednesday, ahead of a key US central bank meeting that could provide signals on the much-monitored tapering front, even as worries persisted over China Evergrande Group's debt saga and the spread of the Delta variant of the coronavirus.

The key Straits Times Index slipped 15.15 points or 0.49 per cent to 3,048.05, following extended losses in Wall Street overnight after a choppy session.

Regional bourses closed mixed. China, which returned from a two-day holiday, saw its key gauge, the Shanghai Composite, reverse losses to close 0.4 per cent higher. Contagion fears over Evergrande were somewhat cushioned by a cash injection from the People's Bank of China.

The Hong Kong and South Korean markets were closed. Equity benchmarks in Japan and Malaysia retreated, and Australian shares gained ground.

Maybank FX Research reckoned that clarity and reassurance on the taper schedule and policy normalisation from the US Federal Open Market Committee (FOMC) would remove uncertain elements and restore stability in the markets.

In Singapore, rising Covid-19 cases continue to be closely watched. IG market strategist Yeap Jun Rong said in a note: "The ICU (intensive care unit) capacity will be on watch as a key determinant for whether there will be further restrictions to come. That said, the latest SGX fund flow report reveals a net institutional inflow of S$260 million, the highest in three weeks".

For the STI, the 3,000 psychological level may seem like a near-term mark to watch. It has supported the index on three occasions previously, he added.

Turnover came in at some 1.62 billion units worth S$1.22 billion. Losers outpaced gainers, with 200 counters down and 169 up. Wednesday's losses were led by Singapore's banking trio DBS, UOB and OCBC.

Sembcorp Marine was the day's second most active counter - penny stock Shen Yao was the most active - with 133 million shares worth nearly S$11 million traded. The counter retreated S$0.002 or 2.35 per cent to S$0.083, on news that Temasek has made a mandatory conditional general cash offer for SembMarine shares at S$0.08 apiece after the investment firm raised its stake following a rights issue.

Nanofilm Technologies International fell S$0.02 or 0.47 per cent to S$4.23. According to filings, the company's founder and executive chairman Shi Xu sold a one per cent stake in the company to an indirect wholly-owned subsidiary of Temasek Holdings for S$27.1 million, which works out to S$4.12 per share; this was a 3.1 per cent discount to its stock price on Tuesday's close.

StarHub lost S$0.01 or 0.8 per cent to S$1.23. The telco said on Wednesday that it is acquiring a 50.1 per cent stake in MyRepublic's broadband business in Singapore for an initial consideration of S$70.8 million.