Asian markets mauled by bearish sentiment, STI closes 40 points down

SINGAPORE - Asian markets were mauled by bearish sentiment on Monday, with Singapore shares dropping the most in close to two months as investors sought shelter ahead of the Federal Reserve meeting this week.

The benchmark Straits Times Index (STI) pared 40.15 points or 1.37 per cent to 2,900.28. The drop was STI's largest since March 8, with the whole market seeing only S$746.3 million worth of shares change hands in a tepid session.

But Singapore was not the only laggard. All key Asian markets ended in the red, with Shanghai down 0.42 per cent while Hong Kong dropped 0.76 per cent. Tokyo also shed 0.76 per cent, and Kuala Lumpur was down 0.2 per cent. Sydney was closed for holiday.

The declines came ahead of the Federal Open Market Committee two-day meeting in the United States, starting today (April 26). This will be followed by the Bank of Japan meeting tomorrow (April 27).

The Fed meeting is expected to hold US rates steady, with the hike expected to come later in June, according to economists polled by Reuters. But central bank meetings are typically met with speculations that prompt investors into taking their money off the market to avoid kneejerk reactions.

The selloff also spilled over to the energy market, where traders took profit on recent gains to send crude oil futures Brent dropping over 1 per cent to below US$45 (S$60.9) a barrel on Monday.

As the downside pressure built up, Sembcorp Marine again took the brunt of the market jitters. It dropped nine cents or 4.89 per cent to S$1.75, the top loser among the 27 STI component stocks that ended the day lower. Another offshore and marine blue chip Keppel Corp was also pelted, closing down 15 cents or 2.63 per cent to S$5.55.

Singapore Technologies Engineering pared 15 cents or 4.41 per cent to S$3.25. In the property sector, CapitaLand closed down 11 cents or 3.44 per cent at S$3.09 while City Developments Limited dropped 26 cents or 2.9 per cent to S$8.71.

Meanwhile, OSIM International dropped half a cent or 0.36 per cent to S$1.39.

The bid by chief executive Ron Sim to buy out the firm at S$1.39 a share is nearing its closing date of April 29, with Mr Sim only having 80.3 per cent shares of the company as of last Friday - well short of the 90 per cent that he needs to be able to launch a compulsory acquisition of all remaining shares.

whwong@sph.com.sg