Bulls And Bears

Asian markets cautious ahead of Fed speech

STI down 17.39pts, affected partly by several counters going ex-dividend

Markets in Asia traded cautiously as investors geared up to US Federal Reserve chairman Jerome Powell's speech in Jackson Hole, with equities here weighed down by financials and effects from counters going ex-dividend yesterday.

The Straits Times Index (STI) ended the week at 3,110.35, down 17.39 points, or 0.6 per cent. The blue-chip index lost 4.68 points, or 0.15 per cent, from the previous week's close of 3,115.03.

Elsewhere, Australia, China, Hong Kong, Japan and Malaysia finished higher, while South Korea closed lower.

Ahead of Mr Powell's address yesterday, expectations were that the Fed chairman "will lean dovish and pre-commit to a September rate cut which will be viewed supportive for equity markets", VM Markets managing partner Stephen Innes noted.

IG market strategist Pan Jingyi said: "Should Fed's Powell fail to deliver in the upcoming Jackson Hole address, Asia markets may once again be disappointed going into the start of the new week."

Singapore's inflation data for last month fell below street expectations, prompting the Monetary Authority of Singapore (MAS) to ease its full-year outlook slightly. The MAS now expects full-year core inflation to fall within the lower half of its forecast of 1 per cent to 2 per cent.

MAS chief economist Edward Robinson had soundly rejected off-cycle adjustments to the Singapore dollar policy last week, but economists from United Overseas Bank, Standard Chartered Bank, HSBC and JPMorgan, among others, are expecting the central bank to ease monetary policy in October with a 50-basis-point reduction to the Singapore dollar nominal effective exchange rate policy slope.

In Singapore, trading volume clocked in at 1.07 billion securities. Total turnover reached $958.46 million. Across the market, decliners trumped advancers 246 to 141. The blue-chip index had 23 of the 30 counters closing in the red.

Yangzijiang Shipbuilding shares were the most active counter on the STI yesterday, closing 1.5 Singapore cents lower at 91.5 cents, with 41.6 million shares changing hands.

After reaching a 52-week high on Thursday, Thai Beverage extended those gains to close 0.5 cent, or 0.5 per cent, higher at 93.5 cents.

The STI's showing was weighed down by a number of counters trading ex-dividend yesterday, including four Jardine counters. Among them were property pick Hongkong Land (down 13 US cents to US$5.57) and Jardine Strategic Holdings (down 24 US cents to US$32.03).

DBS, United Overseas Bank and OCBC Bank also closed lower before Mr Powell's speech.

A version of this article appeared in the print edition of The Straits Times on August 24, 2019, with the headline 'Asian markets cautious ahead of Fed speech'. Print Edition | Subscribe