Sep 11, 2015

    STI upswing ends amid US rate-hike fears

    THE Singapore market fell back into the red yesterday on renewed concerns over when the United States might hike interest rates.

    The benchmark Straits Times Index (STI) slid 40.15 points, or 1.37 per cent, to 2,888.03, putting a halt to its two-day upswing, although it ended the shortened week ahead 0.8 per cent.

    This mirrored overnight sentiment in Wall Street, which dropped 1.45 per cent, with traders kept on edge ahead of the Federal Reserve's policy meeting next week.

    Some market watchers, including World Bank chief economist Kaushik Basu, have called for a delay on any interest-rate rise in the US, given the slowing growth in China.

    Others, however, believe the first hike may still come in before the end of the year.

    Volatility was evident across the region as well: Japan fell 2.5 per cent, despite scoring a historic 7.7 per cent surge on Wednesday; Shanghai shed 1.4 per cent, its first decline in three trading days; Hong Kong sank 2.59 per cent.

    "Markets will remain volatile until the Fed meeting next week," Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors, told Bloomberg.

    "Investors are again focusing on the potential US interest-rate increase and how it would impact emerging markets."

    At home, the index's losses were driven largely by the three local banks.

    United Overseas Bank fell 33 cents or 1.7 per cent to $19.47, DBS Group lost 24 cents or 1.3 per cent to $17.72 and OCBC Bank slipped 12 cents or 1.3 per cent to $9.02.

    Telco Singtel was also among the day's biggest laggards, shaving five cents or 1.3 per cent to $3.72.

    Commodity counters continued to retreat amid the slump in the sector, with Noble Group sinking two cents or 3.8 per cent to 51 cents.

    Wilmar International lost nine cents or 3.4 per cent to $2.57 and Golden Agri-Resources shed one cent or 3.2 per cent to 30 cents.

    Notably, both Jardine Matheson and agri-business group Olam International finished stronger, reversing their losing streaks for the past few days following news of their impending exit from the STI.

    Jardine Matheson rose 70 US cents or 1.5 per cent to US$48.70, while Olam climbed 2.5 cents or 1.3 per cent to $1.975.

    Offshore services provider Ezra Holdings was the day's most active, with 40.7 million shares being traded. The counter fell 0.2 cent or 1.6 per cent to 12.7 cents.

    Overall, about 914.3 million shares worth $758.7 million changed hands.

    The market is closed today for the election.