Singapore banks reverse midweek gains; STI down 1.6% ahead of US jobs data

SINGAPORE – Local investors were scrambling for leads on Jan 10 after Wall Street was closed overnight to mark former US president Jimmy Carter’s memorial.

The closure came a day ahead of crucial US jobs figures that will determine the trend of interest rates, so the air of drift and uncertainty was especially acute.

The outcome here left the Straits Times Index (STI) down a chunky 1.6 per cent or 61.04 points to 3,801.56, with the banks taking a major hit. Losers outnumbered gainers 346 to 192 on trade of 898.6 million securities worth $1.2 billion.

It was pain all round for the local lenders after hitting record highs recently: DBS shed 1.9 per cent to $44.13, OCBC Bank was down 2.3 per cent at $17.10, and UOB declined 2 per cent to $36.82.

OCBC Investment Research downgraded UOB to “hold” in a Jan 10 note, pointing out that its shares had outperformed in the past two months and its fair value of $37.50 had been reached earlier in the week.

Yangzijiang Shipbuilding lost 3.5 per cent to $3, after falling 5 per cent by the midday break. It was the third-highest traded counter by volume, with 25.7 million shares done.

There were no gainers among the 30 STI constituents while four counters – DFI Retail Group, Mapletree Logistics Trust, Sats and UOL – ended flat.

Key regional indexes were also largely flat. Hong Kong’s Hang Seng lost 0.9 per cent, South Korea’s Kospi dipped 0.2 per cent and the Nikkei 225 in Japan declined 1.1 per cent, while Malaysian shares ticked up 0.1 per cent.

Australian shares lost 0.4 per cent with banks again the biggest losers on cautious trade ahead of those US employment numbers.

Wall Street futures also dipped as investors there braced themselves for strong jobs numbers, which could see the US Federal Reserve leave rates on hold. A report on the heavy insurance bill from the Los Angeles fires also weighed on sentiment.

THE BUSINESS TIMES