Investors take profit, anticipate Fed hike
A BOUT of profit-taking and rising prospects of a mid-year United States interest rate hike sent Singapore stocks into negative territory.
The key Straits Times Index closed 14.65 points down at 3,426.18, with 1.1 billion shares worth $893 million changing hands.
The index was weighed down by banking counters and two Jardine stocks. DBS Group Holdings slipped 0.7 per cent, or 13 cents to $19.69, with 3.17 million shares traded; United Overseas Bank shed 0.3 per cent or six cents to $22.99; while OCBC Bank fell 0.4 per cent or four cents to $10.59, with 3.89 million shares changing hands.
Jardine Matheson slipped 1.4 per cent, or 90 US cents to US$65.20 a share, while Jardine C&C fell 1.2 per cent or 54 cents to $42.95.
Genting Singapore, which announced poorer-than-expected fourth quarter earnings on Tuesday, was among the most actively traded counters for a second day. The casino operator's shares closed unchanged at 98 cents, with 38.8 million shares done.
"Genting breached the important price support of $1, which triggered market speculation that it could hit 70 cents by year end," remisier Alvin Yong said.
"But it is not alone in posting bad results. The slowdown in VIP volumes is afflicting most gaming operators worldwide."
Meanwhile, US Federal Reserve chair Janet Yellen, in her testimony before the Senate Banking Committee on Tuesday, was upbeat about the US economic recovery, lending support to growing expectations that the Fed will raise its benchmark short-term rate from near zero by about mid-year.
Phillip Futures analyst Howie Lee noted: "The ring of good news overshadows her hawkish tone. The hawkishness is in response to how well the US economy is improving, as opposed to having to raise rates out of necessity. And if US economic data keeps improving at this pace, it will be hard-pressed to argue against a rate hike."