Singapore shares close flat as traders await key US inflation data

SINGAPORE - Singapore shares on Feb 13 began the holiday-shortened week on a flat note, with all eyes on the latest US inflation data that will shape market expectations for rate cuts by the world’s largest central bank.

The Straits Times Index (STI) rose 3.57 points or 0.11 per cent to 3,141.87, following Wall Street’s mixed showing overnight, with the Dow Jones Industrial Average pushing to a fresh record, ahead of the release of the US’ January headline consumer price index.

Expectations are for the disinflationary trend in the United States to remain intact.

While higher-than-expected inflation figures could scale back market expectations for rate cuts and fuel the US dollar’s upside, a softer print will gladden markets.

Still, investors may be too optimistic over the Fed’s potential rate cut trajectory, some economists say.

DBS Group Research’s economics team said in a note: “We think some rate cuts are possible in the second half of 2024 if inflation remains well-behaved, but market pricing for at least 200 bps (basis points) in cuts in 2024-2025 might be too optimistic.

“Growth would have to slow materially, perhaps driven by instability in the financial sector, for that to happen. No sign of (that) for now.”

Key gauges in Japan, South Korea and Malaysia finished higher, while Australia bucked the trend. Markets in China, Hong Kong and Taiwan remained closed for the Chinese New Year holiday.

Turnover on the local bourse stood at 1.16 billion units worth $1.18 billion. Advancing stocks outnumbered falling ones by 211 to 154.

The trio of local banks ended mixed: DBS Bank fell 0.2 per cent to $32.49, OCBC Bank was unchanged at $12.95 and UOB rose 0.3 per cent to $28.22.

Seatrium, Thai Beverage and Singtel were the day’s most actively traded counters.

ComfortDelGro’s announcement that its wholly owned unit has acquired a Britain-based ground transport management and accommodation network specialist for £80.2 million (S$136 million) to widen its footprint failed to stir excitement. Shares of the land transport giant fell one cent or 0.7 per cent to $1.39.

Straco jumped 4.5 cents or nearly 10 per cent to 51 cents after the company guided on Feb 9 before the lunar trading holidays that it expects to report a substantial net profit for financial year 2023, swinging into the black from a net loss reported in FY2022.

The tourism facilities operator said the stronger showing was due to higher revenue from the company’s China attractions in FY2023.

THE BUSINESS TIMES