Bulls and bears

Markets in disarray over US Fed, BOJ decisions

Afternoon losses wipe off early gains across the region as central banks surprise investors

Asian markets had a roller-coaster ride yesterday, with sentiment torn between policy decisions made by two of the world's biggest central banks.

While the United States Federal Reserve met expectations by opting to delay an interest rate hike, the Bank of Japan kept rates steady, surprising regional investors who wanted to see more easing for the stagnant economy.

This led to afternoon losses that wiped off early gains across the region. Singapore's benchmark Straits Times Index opened at 2,892 and rose to as high as 2,900 but closed down 12.42 points or 0.43 per cent at 2,862.30. Turnover was livelier, however, with 1.36 billion shares worth $975.5 million transacted across the market.

Elsewhere in Asia, Shanghai dropped 0.27 per cent, Hong Kong rose a marginal 0.12 per cent and Kuala Lumpur was down by 1.04 per cent. Tokyo was unsurprisingly the top loser, shedding 3.61 per cent, while the Japanese yen surged 3 per cent against the US dollar, its largest jump since August last year.

Remisier Alvin Yong said: "The market disarray showed perhaps the case for more easing measures has been overestimated. From here on, I think STI will stay range-bound below 2,960. Earnings are the key focus after the central bank events and, so far, the figures have not offered any pleasant surprise."


ST GRAPHICS

The biggest results announcement yesterday was by the United Overseas Bank, whose first-quarter net profit dropped 4.4 per cent but was still in line with analyst expectation. UOB closed down three cents or 0.16 per cent at $18.85, one of the 16 STI constituents that ended lower yesterday. OCBC, which reports its results today, pared nine cents or 1 per cent to $8.90. DBS dropped 16 cents or 1.03 per cent to $15.44.

Genting Singapore, which showed further weakness in its gaming business after announcing last week the liquidation of a Macau subsidiary set up for a casino venture, dropped two cents or 2.35 per cent to 83 cents, with 24.2 million shares traded.

On the other end of the spectrum, Sembcorp Marine rose 1.5 cents or 0.9 per cent to $1.685. The counter has been resilient in the past two weeks as crude oil benchmark Brent futures recovered to above US$47 a barrel. DBS analysts, however, maintained a bearish view with a target price of $1.24 for SembMarine. DBS said in a note yesterday: "(The share price rally) could be short-lived without any meaningful change in fundamentals. We believe rig orders are unlikely to make a comeback anytime soon, given the supply glut amid the oil crisis."

Sats rose 17 cents or 4.25 per cent to $4.17, the most among blue chips, while Thai Beverage gained one cent or 1.33 per cent to 76 cents.

Outside the STI, SMRT dropped half a cent or 0.34 per cent to $1.48, before reporting its fourth-quarter and full-year results. Its net profit for the three months to March 31 was up 27.6 per cent to $26.6 million.

A version of this article appeared in the print edition of The Straits Times on April 29, 2016, with the headline 'Markets in disarray over US Fed, BOJ decisions'. Print Edition | Subscribe