SINGAPORE - Singapore stocks ended 1.1 per cent lower on Friday, with the Straits Times Index retreating 38.66 points to 3,377.24. About 2.54 billion shares worth $1.96 billion in total changed hands.
Continued volatility in the market, including a plunge in China stocks and the previous night's 4 per cent drop in US stocks, weighed the index down.
Strong buying sentiment for DBS, however, meant that while it fell to as low as $25.92, it eventually ended trading unchanged at $26.71.Losers outnumbered gainers 448 to 85, or about five down for every one up.
Asian markets had been shaken up in the morning after the Bank of England (BOE) hinted overnight at an earlier and larger raising of interest rates.
Stocks in Singapore, Malaysia, Tokyo and Australia were a sea of red when their respective markets opened.
The regional selloff followed big falls on Wall Street and in Europe overnight.
The BOE stoked market fears of a faster pace of monetary tightening policy in commenting that monetary policy will "need to be tightened somewhat earlier and by a somewhat greater extent" compared to November.
It also upgraded its growth and inflation forecast in the accompanying inflation report. This sent UK yields four to nine basis points higher across the curve, and drove equities 1.5 per cent lower.
US yields initially pushed higher, with the 10-year yield hitting as high as 2.88 per cent, before falling back.
IG market strategist Pan Jingyi said that the hawkish guidance by the BOE "certainly renewed jitters" for a market concerned about looming risks from higher borrowing costs.
"For US yields, there is the added pressure as worries mounted over the government deficit with lawmakers dwelling over a substantial two-year spending bill," she said.
Nevertheless, Mizuho Bank is expecting the rise in yields to stay controlled due to the unsteady equity markets, even as it will eventually march higher given the robust global growth, expansionary fiscal policy, and a retreat from quantitative easing by major central banks.
