Singapore shares fall on signs of Fed’s tight reins on rate cuts; STI down 0.6%

SINGAPORE – Signals that the US Federal Reserve will be keeping a tight rein on rate cuts in 2025 had a dampening effect on shares here and across the region on Jan 9.

The Straits Times Index (STI) slipped 0.6 per cent, or 24.38 points, to 3,862.6, with losers beating gainers 281 to 222 on modest trade of 982.3 million shares worth $913.1 million.

Regional indexes were mostly in lockstep. Hong Kong’s Hang Seng Index fell 0.2 per cent, the Nikkei 225 in Japan declined 0.9 per cent and Malaysian stocks retreated 0.9 per cent, while South Korea’s Kospi ended largely flat.

The ASX 200 in Sydney snapped a five-day winning streak to drop 0.2 per cent despite data showing Aussies splashed out over the Black Friday sales.

Wall Street was in much the same mood overnight, with swings between gains and losses that eventually left the S&P 500 up 0.2 per cent, while the Dow Jones Industrial Average added 0.3 per cent and the tech-heavy Nasdaq dipped 0.1 per cent.

UOB senior economist Alvin Liew said he expects a pause in interest rate cuts in the January meeting as the Fed “takes stock of the inflation and growth outlook under the new Trump administration”.

“The reduced number of cuts reflects the higher inflation pressures from the projected tariff implementation during the latter part of 2025,” he said in a note.

Meanwhile, Parkway Life Real Estate Investment Trust climbed 0.8 per cent to $3.79 here, after Maybank Securities initiated coverage with a “buy” call and target price of $4.10.

The STI’s biggest gainer was Yangzijiang Shipbuilding, which added 1 per cent to $3.11, while integrated resort operator Genting Singapore was at the bottom of the index, sliding 2.6 per cent to 76 cents.

The local banks were also in the red: DBS Bank dropped 1 per cent to $45, UOB slid 0.6 per cent to $37.58, while OCBC Bank dipped 0.3 per cent to $17.50.

THE BUSINESS TIMES