Sluggish bourse awaits outcome of US Fed meeting, STI ends 20 points down

The Straits Times Index closed 19.94 points or 0.69 per cent lower at 2,874.72 on April 27, 2016.
The Straits Times Index closed 19.94 points or 0.69 per cent lower at 2,874.72 on April 27, 2016.ST PHOTO: DESMOND WEE

SINGAPORE - Singapore shares dropped for the fourth straight session in another choppy day across Asia.

Much of the current sluggishness has been down to investor caution around the Federal Reserve meeting, which will end early Thursday morning, but analysts do not see reasons to be optimistic emerging any time soon.

The benchmark Straits Times Index closed 19.94 points or 0.69 per cent lower on Wednesday at 2,874.72, with 924.1 million shares worth S$802.6 million transacted across the whole market in a slow day.

The wait for more clarity from the Fed April meeting outcome is all about deciphering the meeting statement out this morning, IG analyst Bernard Aw said.

"Investors will instead be watching for the language used in the meeting to describe the balance of risks. If the Fed describes the risk profile for growth as something like more balanced, then we know they are preparing the market for a likely June hike," he told The Straits Times.

But whatever the meeting portends, economic and business headwinds still persist, Mr Aw said, adding: "The global growth outlook remains uncertain and I don't expect a lot of upside for Singapore corporate earnings this year."

This was reflected in the latest economic review by Monetary Authority of Singapore, which noted yesterday that the growth outlook for Singapore's key trading partners "has weakened discernibly".

Only 10 STI constituent stocks rose as investors assessed the uncertain market backdrop. Genting Singapore added 2.5 cents or 3.03 per cent to close at 85 cents, and Thai Beverage put on two cents or 2.74 per cent to 75 cents.

Keppel Corp managed to add one cent or 0.18 per cent to S$5.51, as crude oil futures Brent continued its recovery to hit above US$46 a barrel - the highest level seen so far this year - on the back of the weaker greenback.

Sembcorp Marine, however, dropped half a cent or 0.3 per cent to S$1.67, ahead of its results announcement after the market close.

Elsewhere, Shanghai shed 0.37 per cent and Hong Kong dropped 0.21 per cent. Tokyo closed 0.36 per cent lower as investors there had reason to be cautious with the Bank of Japan starting its April policy meeting.

whwong@sph.com.sg