Bulls And Bears

Another rocky day as market eyes Fed meet

Investors play it safe on SGX, although US policymakers unlikely to hike rates

Singapore stocks faced a second rocky day as traders steered clear of risk ahead of a closely-watched United States interest rate meeting.

The benchmark Straits Times Index (STI) slid 12.02 points, or 0.39 per cent, to 3,040.51.

Trading on the exchange was thin, with 1.02 billion shares worth $825.7 million changing hands.

Markets elsewhere in the region mostly fell into the red as well, taking their cue from Wall Street, which dropped 0.24 per cent overnight on mixed earnings reports.

Shanghai sank 1.72 per cent, dragged down by concerns that China's slowing economy was weighing down on profit margins and encouraging bad loans, while Hong Kong slipped 0.8 per cent.

Tokyo bucked the trend with a 0.67 per cent rise, backed by brisk earnings reports.

"Markets are keeping a low profile ahead of the Federal Open Market Committee meeting, with investors cutting risk from their portfolios," said IG market strategist Bernard Aw. The US Federal Reserve's policymaking arm met on Tuesday and yesterday.

"To be sure, chances of a rate move in the meeting are extremely remote," he added. "It is widely expected to be a non-event for financial markets as a combination of soft inflation and recent economic data dented the policymakers' confidence to hike interest rate."

At home, the three local banks led losses. OCBC shaved eight cents, or 0.86 per cent, to $9.20 after reporting a 27 per cent slide in third-quarter net profit to $902 million.

DBS Group lost 27 cents, or 1.52 per cent, to $17.45, while United Overseas Bank fell 27 cents, or 1.33 per cent, to $20.

Ascendas Real Estate Investment Trust (Reit) was also among the day's laggards, losing seven cents, or 2.79 per cent, to $2.44.

On the other side of the ledger, rigbuilders Sembcorp Marine and Keppel Corp made good showings even as oil prices show little signs of improvement. SembMarine rose four cents, or 1.72 per cent, to $2.37, while KepCorp was up four cents, or 0.56 per cent, at $7.16.

KepCorp announced yesterday that its shipbuilding unit, Keppel Fels, had delivered its eighth rig this year ahead of schedule.

Commodity trading giant Noble Group was the most heavily traded stock, with 64.2 million shares being moved. The stock was unchanged at 53.5 cents.

Agri-business Olam International gained two cents, or 1 per cent, to $2.02, after announcing early yesterday it had secured about US$1 billion (S$1.4 billion) in new loans. The facility will be used to refinance its debt and meet its working capital and general corporate funding needs.

A version of this article appeared in the print edition of The Straits Times on October 29, 2015, with the headline 'Another rocky day as market eyes Fed meet'. Print Edition | Subscribe