Singapore shares closed lower on a negative lead from Wall Street as oil prices fell to new multi-year lows on fresh concerns over a supply glut. A stronger US dollar also dragged oil prices lower.
The Straits Times Index fell 8.34 points or 0.29 per cent to 2,852.84, though it managed to eke out a 0.6 per cent gain for the week.
"Although the Fed hike finally happened... the STI still gapped down, erasing a lot of Thursday's rebound," remisier Desmond Leong said.
Caution reigned as a so-called quadruple witching day fell yesterday with key futures and options all expiring. Generally, market volatility is heightened on such days as investors unwind positions, he said.
A continued slump in commodities and weaker crude oil weighed on commodities counters.
Noble Group, the most actively traded stock, dipped 1.2 per cent or 0.5 cent to 42.5 cents, with 44.5 million shares traded. Golden Agri-Resources fell 1.6 per cent or 0.5 cent to 31.5 cents, with 30.2 million shares traded, and Wilmar International dropped 1.4 per cent or four cents to $2.88. Oil prices are now near seven-year lows, with US WTI crude prices at about US$35 a barrel, while Brent is about US$37 a barrel.
"Despite the mere certainty provided by the Fed action, the road ahead does not seem hunky-dory for global equities," IG markets strategist Bernard Aw said. "With global and Chinese economies still slowing, and the weakness in oil raising doubts on the global inflation outlook, how fast can the Fed raise interest rates next year?" .
Cosco Corp, which resumed trading on Dec 14 after being suspended since Aug 11, rebounded 13.3 per cent or four cents to 34 cents, with 21 million shares traded. Its parent, China Ocean Shipping, had been in talks to merge with China Shipping Group. "The stock has been massively oversold after being suspended for so long," Mr Leong said. It had warned of significant net losses for its fourth quarter and full year ending Dec 31.
Sunpower Group got hit with a Singapore Exchange trading query on unusual price movements in its shares. The stock jumped 14.6 per cent or 3.5 cents to 27.5 cents, with 3.1 million shares traded.
Meanwhile, OCBC Investment Research has buy calls on Wing Tai, Wheelock Properties, CapitaLand and UOL Group, despite a significant persistent physical supply overhang and higher mortgage rates, putting pressure on rental rates and housing affordability.
"But on the flip side, we see potential curb reversals after price declines reach double digits in the second half of next year and beyond," OCBC said.
"We favour high-end developers which are trading at attractive discounts to their fundamental valuations: Wing Tai and Wheelock. We also like CapitaLand and UOL for their diversified business model and asset portfolios, healthy balance sheet and attractive valuations."