SINGAPORE - Singapore shares started Thursday (Aug 1) on lower ground, following hefty losses on Wall Street overnight after the US Federal Reserve cut interest rates by 25 basis points as expected but dashed market hopes of a lengthy easing cycle.
The Straits Times Index lost 16.36 points or 0.5 per cent to 3,284.39 as at 9.04am.
About 44.4 million shares worth about $73.6 million changed hands, which worked out to an average unit price of about $1.66 per share.
Losers beat gainers 93 to 45.
The most actively traded security was disk drive components company Accrelist, which traded up $0.001 or 33.3 per cent to $0.004 with 5.6 million shares changing hands. Other actives included Golden-Agri Resources and Anchor Resources.
Among financials, all three local banks lost ground after the US Fed announced rate cuts. DBS declined $0.06 or 0.2 per cent to $26.35 while UOB was down $0.07 or 0.3 per cent to $26.33.
OCBC shares lost $0.12 or 1 per cent to $11.42. Its insurance arm, Great Eastern Holdings, dropped $0.12 or 0.5 per cent to $25.30 after announcing a 29 per cent drop in second-quarter net profit before the market opened.
Other index stocks didn't fare much better, Singtel edged down $0.01 or 0.3 per cent to $3.32 with 2.8 million shares changing hands after its outlook was cut to "negative" by credit agency Standard & Poor's. Meanwhile, CapitaLand shares lost $0.05 or 1.4 per cent to $3.57.
The rate cut was the Fed's first in more than a decade, meeting market expectations but not going with the larger 50-basis-point cut that some traders expected.
"We're thinking of it essentially as a midcycle adjustment to policy," said Fed chair Jerome Powell. "It's not the beginning of a long series of rate cuts - I didn't say it's just one....What we're seeing is that it's appropriate to adjust policy to a somewhat more accommodative stance over time, and that's how we're looking at it."
His remarks sent the Dow Jones Industrial Average plunging almost 500 points at one point before the benchmark closed 335 points or 1.2 per cent down at 26,864.27. The S&P 500 shed 1.1 per cent to 2,980.36, while the tech-rich Nasdaq Composite Index also slid 1.2 per cent to 8,175.42.
In Europe, positive corporate earnings and optimistic signs from US-China trade talks propped up shares on Wednesday.
The pan-European Stoxx 600 rose 0.2 per cent, recovering from its worst day in nearly three months on Tuesday while the trade-sensitive DAX rose 0.3 per cent.
In other early Asian trading sessions, Tokyo's benchmark Nikkei 225 index lost 0.82 per cent or 176.08 points to 21,345.45.