SINGAPORE - Fears of inflation and concerns that the United States Federal Reserve could rein in its monthly bond purchases resulted in one of the most turbulent weeks this year for equities.
Nervousness intensified in the middle of last week when the release of last month's Fed minutes suggested that policymakers broached the subject of tapering down the bond purchases.
But the meeting took place before last month's US job numbers were announced, which came in far below expectations.
A volatile week saw the New York Dow Jones ending the week with a 174.26-point loss at 34,207.87.
The broader S&P index ended flattish at 4,155.86 points.
Tech turbulence saw the Nasdaq see-saw between positive and negative territories before ending the week with a 91.94-point gain.
Despite the volatility, the tech-heavy index jumped to a two-week high, with gains in megacaps such as Apple, Microsoft and Tesla powering the advance.
In Singapore, the Straits Times Index ended the week up 2.1 per cent at 3,117.89 as blue chip and value stocks continued to climb.
This brings the year-to-date total return for the benchmark Singapore index to 11.3 per cent, making the index among Asia-Pacific's three strongest performers this year.
At last Friday's close, the index was up 3.1 per cent from its May 14 low, and down 3.7 per cent from its high of 3,237 points on April 30.
One of the strongest performers last week was high-end watch retailer The Hour Glass, whose stock rose 12 cents last Friday to a record $1.08 after it posted a 9 per cent rise in earnings for the full year ended March 31 and declared a final dividend of four cents per share. The company's cash and cash balances rose to $248 million.
Electronics component suppliers performed strongly as well, with Venture Corporation and AEM gaining 3 per cent each, NanoFilm Technologies jumping 5.3 per cent, and UMS Holdings up 1.5 per cent. Frencken Group surged 17.6 per cent on the back of analysts' re-rating.
Mapletree Industrial Trust was also in the spotlight, rising almost 4 per cent on heavy volumes as it expanded its footprint in the digital realm with the acquisition of 29 more data centres in the US.
This raises the proportion of data centres in its portfolio of assets under management to almost 54 per cent, from 41 per cent earlier.
Markets will continue to watch whether the Fed will taper down its bond purchases, which currently stand at around US$120 billion (S$160 billion) a month, bringing the Fed balance sheet to almost US$8 trillion - double its pre-Covid-19 levels.
However, the US yield curve has stabilised at about 1.5 per cent, indicating that inflation concerns have abated somewhat, though they are still evident.
But let's step back a little and ask: Given the current state of the economy, how much higher can interest rates rise? What difference would it really make to corporates or individuals? Wouldn't a bit of normality be a good thing?
Singapore's consumer price numbers for last month will be out on Monday, and could come in marginally higher than the 1.3 per cent year-on-year seen in March.
On Tuesday, the final gross domestic product for the first quarter will be released, and could be revised upwards from the advanced estimate of 0.2 per cent growth. Tuesday will also see last month's industrial production report, which is expected to come in below the 7.6 per cent year-on-year growth observed in March.
With some resilience expected in the data, markets will watch the number of locally transmitted Covid-19 cases, while pausing mid-week to celebrate Vesak Day.
