Singapore market falls 40 points over US Fed rate hike decision

The benchmark Straits Times Index (STI) slid 40.15 points, or 1.37 per cent, to 2,888.03 on Thursday, Sept 10, 2015.
The benchmark Straits Times Index (STI) slid 40.15 points, or 1.37 per cent, to 2,888.03 on Thursday, Sept 10, 2015. PHOTO: AFP

SINGAPORE - The Singapore market fell back into the red on Thursday (Sept 10), dragged down by renewed concerns over the United States' decision to hike interest rates.

The benchmark Straits Times Index (STI) slid 40.15 points, or 1.37 per cent, to 2,888.03, putting a halt to its two-day upswing. It is up 0.8 per cent from last Friday.

This mirrored overnight sentiment in Wall Street, which dropped 1.45 per cent, with traders kept on edge ahead of the Federal Reserve's policy meeting next week.

Some market watchers, including the World Bank's chief economist Kaushik Basu, have called for the brakes to be pulled on higher interest rates in the US, given the slowing growth in China.

Others, however, believe the first hike may still come in before the end of the year.

Volatility was evident across the region as well: Japan fell 2.5 per cent, despite scoring a historic 7.7 per cent surge on Wednesday.

Shanghai shed 1.4 per cent, logging its first decline in three trading days, while Hong Kong sank 2.59 per cent.

"Markets will remain volatile until the Fed meeting next week," Mr Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors, told Bloomberg.

"Investors are again focusing on the potential US interest-rate increase and how it would impact emerging markets."

At home, the index's losses were driven largely by the three local banks.

United Overseas Bank fell 33 cents or 1.7 per cent to $19.47, DBS Group lost 24 cents or 1.3 per cent to $17.72 and OCBC Bank slipped 12 cents or 1.3 per cent to $9.02.

Telco company Singtel was also among the day's biggest laggards, shaving 5 cents or 1.3 per cent to $3.72.

Commodity counters continued to retreat amid the slump in the sector, with Noble Group sinking 2 cents or 3.8 per cent to 51 cents.

Wilmar International lost 9 cents or 3.4 per cent to $2.57 and Golden Agri-Resources shed 1 cent or 3.2 per cent to 30 cents.

Notably, both Jardine Matheson and agri-business group Olam International finished stronger, reversing their losing streaks for the past few days following news of their impending exit from the STI.

Jardine Matheson rose 70 US cents or 1.5 per cent to US$48.70, while Olam climbed 2.5 cents or 1.3 per cent to $1.975.

Offshore services provider Ezra Holdings was the day's most active, with 40.7 million shares being traded. The counter fell 2 cents or 1.6 per cent to 12.7 cents.

Overall, some 914.3 million shares worth $758.7 million changed hands.

The market is closed on Friday (Sept 11) as Singapore goes to the polls.

tsjwoo@sph.com.sg