Singapore shares end nearly flat as markets hold their breath for Fed rate decision

SINGAPORE – Local investors took a wary stance ahead of key data from the United States and left shares wallowing in the doldrums on June 12.

Caution over impending inflation numbers and the upcoming Federal Reserve meeting saw the benchmark Straits Times Index (STI) inch down 0.1 per cent, or 1.77 points, to 3,307.44. Losers beat gainers 309 to 247 after 1.2 billion shares worth $1 billion changed hands.

Regional markets displayed a little more action. Japan’s Nikkei 225 shed 0.7 per cent and Hong Kong’s Hang Seng fell 1.3 per cent, while Seoul’s Kospi gained 0.8 per cent.

Australian stocks slipped for a second day, sliding 0.5 per cent.

There was a subdued lead-in from Wall Street overnight where the S&P 500 added to the record high hit on June 10 by advancing a further 0.3 per cent but the Dow Jones Industrial Average dropped 0.3 per cent. The Nasdaq rose 0.9 per cent.

Mr Vishnu Varathan, Asia ex-Japan chief economist at Mizuho Bank, said markets have already priced in fewer interest rate cuts for 2024.

Investors will instead pay closer attention to US Fed predictions for longer-term rates, as higher inflation or other fiscal and fundamental factors could cause them to shift their expectations higher.

Mr Varathan added that investors will also be on the lookout for the Fed revealing what will trigger it to begin cutting rates.

“Overall, the Fed is prone to err on the side of hawkish restraint, given the baggage of being wrong on (inflation being) ‘transitory’.”

CapitaLand was the STI’s top performer, rising 1.2 per cent to $2.61, while Thai Beverage was at the bottom of the table, falling 3.9 per cent to 49 cents.

The local banks were in the black. UOB rose 0.3 per cent to $30.65; DBS Group Holdings was up 0.3 per cent to $35.65; and OCBC Bank gained 0.3 per cent to $14.23.

THE BUSINESS TIMES