S’pore stocks edge down amid uncertainty over China, Japan central bank rate decisions

SINGAPORE – Shares in Singapore fell on Dec 18 as investors grappled with uncertainty over interest rate expectations in Japan and China.

The benchmark Straits Times Index (STI) fell 0.1 per cent, or 3.28 points, to 3,113.23.

Across the broader market, losers beat gainers 309 to 256, after 1.43 billion securities worth $1.01 billion changed hands.

Regional indexes were mixed. Hong Kong’s Hang Seng Index shed 1 per cent, Japan’s Nikkei 225 fell 0.6 per cent, while South Korea’s Kospi Composite Index gained 0.1 per cent.

SPI Asset Management managing partner Stephen Innes said that Asia’s two major central banks appear to be moving in different directions, something that is contributing to market uncertainty.

“The Bank of Japan is contemplating raising rates, while the People’s Bank of China seems inclined to ease policy to combat deflation and support sluggish growth.

“The lack of clarity on both policy fronts is causing some discord in Asian markets today,” he said.

Still, Mr Innes noted that interest rate futures markets continue to price for 150 basis points of rate cuts from the United States Federal Reserve in 2024.

The decline in bond yields and the US dollar is expected to underpin risk assets throughout the week, Mr Innes added.

On the STI, Venture Corp was the top gainer, rising 2.6 per cent, or 34 cents, to $13.24.

Meanwhile, DFI Retail Group came in at the bottom of the table. It shed 5.1 per cent, or 12 US cents, to US$2.23.

The trio of local banks were mixed on Dec 18.

DBS Bank gained 1.4 per cent, or 44 cents, to $31.50; OCBC Bank rose 1.1 per cent, or 13 cents, to $12.50; while UOB shed 0.3 per cent, or eight cents, to $27.74.

THE BUSINESS TIMES