Singapore equities slump over oil slide, possible April Fed rate hike, STI down 35 points at close

SGX Centre 1 at Shenton Way Road in the Raffles Place District.
SGX Centre 1 at Shenton Way Road in the Raffles Place District. PHOTO: ST FILE

SINGAPORE - Singapore shares slumped as oil prices slid back below US$40 (S$54.5) a barrel on a bigger than expected United States crude stockpile and as the greenback firmed on the possibility of a US interest rate hike as soon as April.

The Straits Times Index slipped 1.2 per cent or 34.59 points to 2,847.39, dragged down by the three banks, and oil-related counters including Keppel Corp and Sembcorp Industries.

OCBC sank 2.6 per cent, or 24 cents to S$8.91; DBS Group fell 1.48 per cent or 23 cents to S$15.34, and UOB dropped 1.2 per cent or 23 cents to S$18.65.

While the US Federal Reserve took a dovish stance at last week's meeting, saying it will likely raise rates twice this year, instead of its previous forecast of four times, officials now seem to be advocating an April hike.

St. Louis Fed President James Bullard was the latest to join a growing number of Fed officials who say it's time for the Fed to move as US inflation and employment growth may exceed targets. San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart made similar comments earlier this week.

"In light of hawkish comments from several Fed officials, we expect the STI to now trade between 2,820 and 2,900," remisier Alvin Yong said.

Weaker oil prices took their toll on Keppel Corp, which fell 2.8 per cent or 17 cents to S$5.87, and Sembcorp Industries, which sank 5.3 per cent or 17 cents to S$3.06. Other actively traded oil-related counters include Ezra Holdings, which dipped 4.3 per cent or 0.5 cents to 11.1 cents, with 91.1 million shares traded. Rex International slipped 1.9 per cent or 0.2 cents to 10.4 cents with 81.5 million shares traded.

The US government's Energy Information Administration said crude stockpiles climbed by 9.4 million barrels last week - three times more than that forecast by analysts in a Reuters poll.

Also weighing down the index is Global Logistic Properties, which fell 3.5 per cent or seven cents to S$1.91, with 26.4 million shares traded. This after it was queried on Wednesday by the Singapore Exchange for unusual price movement. The company said it isn't aware of reasons for this.

gleong@sph.com.sg