Singapore shares slip as investors practise caution following hawkish Fed minutes

SINGAPORE – Another dose of cold water on hopes for more US interest rate cuts sent local shares sliding a tad on Feb 20 after investors opted for a cautious approach.

The US Federal Reserve minutes released on Feb 19 showed that policymakers believe potential changes in trade and immigration policy could add to inflation, implying rates may not be cut.

IG market strategist Yeap Jun Rong said US President Donald Trump’s policies “no doubt added complexity to the Fed’s balancing act between inflation and employment”. “That said, with market expectations already well aligned for a rate hold over the next two (Fed) meetings, the minutes served more as confirmation of existing sentiment,” he added.

The downbeat sentiment sent the Straits Times Index (STI) dipping 0.2 per cent or 6.53 points to 3,927.51, with losers beating gainers 320 to 205 on trade of 1.5 billion securities worth $1.4 billion.

Yangzijiang Shipbuilding extended its gains to finish top of the STI league table, adding 3.1 per cent to $3.30, while Seatrium was the biggest loser, shedding 2 per cent to $2.50. Local banks finished mixed. OCBC slid 0.7 per cent to $17.72, UOB declined 0.4 per cent to $38.43, while DBS added 0.1 per cent to $46.08.

Wall Street managed to strike a positive note overnight despite interest rate concerns and fresh tariff threats. The S&P 500 rose 0.2 per cent – another record close – while the Dow Jones Industrial Average also advanced 0.2 per cent and the Nasdaq rose 0.07 per cent.

Key regional indexes were not swayed by the gains in New York, slight as they were. Hong Kong’s Hang Seng fell 1.6 per cent, South Korea’s Kospi declined 0.7 per cent, the Nikkei in Tokyo lost 1.2 per cent and Malaysian stocks slipped 0.2 per cent.

Australia’s market had its worst day in almost three weeks, falling 1.1 per cent to a five-week low and its fourth consecutive session of decline.

THE BUSINESS TIMES