Share rally fizzles as investors play safe over looming Fed minutes, STI down 15 points

The benchmark Straits Times Index slipped 14.78 points or 0.5 per cent to 2,947.03.
The benchmark Straits Times Index slipped 14.78 points or 0.5 per cent to 2,947.03.PHOTO: ST FILE

SINGAPORE - The rally in Singapore shares fizzled out on Thursday as investors took cash off the table on uncertainty ahead of the release of the minutes of the US Federal Reserve's last policy meeting.

The benchmark Straits Times Index slipped 14.78 points or 0.5 per cent to 2,947.03, weighed down by ComfortDelGro, which shed 2.6 per cent or eight cents to $2.94; Wilmar International, which dropped 2.4 per cent or seven cents to $2.82; Golden Agri-Resources, which fell 5.4 per cent or two cents to 35 cents, with 53 million shares traded. DBS dipped 0.3 per cent or six cents to $17.42.

"Those who had the guts to bottomfish in the past few days would have trimmed some of their positions today," remisier Alvin Yong said. "Corporate earnings for the third quarter are not expected to be fantastic given the weak Singapore GDP figures we've been seeing."

IG market strategist Bernard Aw said the rally in the past three sessions was not based on solid fundamentals. It was based more on speculation of more monetary easing in the pipeline," he said.

Key resistance for the STI is seen at 3,000, and immediate support at 2,930.

Despite the sell-down in most blue chips, Singtel held its ground, rising 0.5 per cent or two cents to $3.77, with 24.3 million shares traded, while Yangzijiang Shipbuilding gained 2.9 per cent or 3.5 cents to $1.24, with 28 million shares traded. Neptune Orient Lines jumped 4 per cent or four cents to $1.04, with 27.6 million shares traded.

"The stock is up on possible corporate action," Mr Yong said. Trading activity in shares of the container shipping liner have been heavy since reports in July saying Singapore state investment firm Temasek Holdings has put it up for sale.

Oil and gas plays were among the most actively traded, as oil prices whipsawed after the latest US Energy Information Administration data showed larger national stockpiles than expected, deepening worries of a supply glut.

Ezra slipping 2.4 per cent or 0.3 cent to 12 cents, with 73.7 million shares changing hands. Ezion shed 3.4 per cent or 2.5 cents to 70 cents, with 23.6 million shares traded. Keppel Corp dipped 0.3 per cent or two cents to $7.16.

Meanwhile, investors are awaiting any clues on the timing of a US interest rate hike.

ABN Amro analyst Nick Kounis sees the first interest rate hike delayed until next June. "We expect a rate hike every other meeting after that, which would leave the target for the fed funds rate in a range of 0.75-1 per cent in December 2016. A delay will give the Fed time to allow financial conditions to stabilize, external uncertainties to wane, and data to improve again. We don't rule out a rate hike in March 2016, if this process turns out to run relatively quickly," he said.

gleong@sph.com.sg