Singapore shares hit hard in Asia-wide decline

All key markets in region end in the red as investors turn cautious ahead of Fed meeting

Asian markets were mauled by bearish sentiment yesterday with Singapore shares recording their biggest fall in almost two months as investors sought shelter ahead of the United States Federal Reserve meeting this week.

The benchmark Straits Times Index (STI) pared 40.15 points or 1.37 per cent to 2,900.28, with only $746.3 million worth of shares changing hands in a tepid session.

Other key Asian markets all ended in the red yesterday, with Shanghai down 0.42 per cent and Hong Kong dropping 0.76 per cent. Tokyo shed 0.76 per cent and Kuala Lumpur was down 0.2 per cent.

The declines came ahead of the US Federal Open Market Committee two-day meeting starting today. This will be followed by a Bank of Japan meeting tomorrow.

The Fed is expected to hold US interest rates steady, with a hike to come in June, according to economists polled by Reuters.

But central bank meetings are typically met with speculation that prompts investors to take their money off the market to avoid kneejerk reactions.

The sell-off also spilled over to the energy market, where traders took profit on recent gains to send crude oil futures Brent dropping over 1 per cent to below US$45 a barrel yesterday.

As the downside pressure built up, Sembcorp Marine again took the brunt of the market jitters, dropping nine cents or 4.89 per cent to $1.75. Keppel Corp was also belted, closing down 15 cents or 2.63 per cent to $5.55.

SembMarine's plunge came as the firm announced that it has started its arbitration against Sete Brasil, which has filed for bankruptcy protection. With its first-quarter results due tomorrow, "the market will likely continue to monitor its cash flows under this difficult operating environment", OCBC analyst Low Pei Han said, maintaining her sell call on the counter.

In the property sector, CapitaLand closed down 11 cents or 3.44 per cent at $3.09 while City Developments Limited dropped 26 cents or 2.9 per cent to $8.71.

OCBC, which will announce its first-quarter results on Friday, closed down 11 cents or 1.17 per cent at $9.28.

Only one STI component stock rose yesterday, with CapitaLand Mall Trust gaining just one cent or 0.48 per cent to $2.09.

Outside the STI, Raffles Medical Group dropped four cents or 0.87 per cent to $4.55 after reporting a 3.7 per cent year-on-year rise in first-quarter net profit to $15.5 million.

Osim International dropped half a cent or 0.36 per cent to $1.39. The bid by chief executive Ron Sim to buy out the firm at $1.39 a share is nearing its closing date of April 29, with Mr Sim having only 80.3 per cent of the company as of last Friday - well short of the 90 per cent he needs to launch a compulsory acquisition of all remaining shares.

A version of this article appeared in the print edition of The Straits Times on April 26, 2016, with the headline 'S'pore shares hit hard in Asia-wide decline'. Subscribe