Singapore stocks retreat as investors keep eye on tariff negotiations; STI dips 0.4%

SINGAPORE – Local investors kept their powder dry on May 8 as global markets awaited news of the trade deal between Britain and the US.

Nerves were also steadied by the much-anticipated decision by Federal Reserve chairman Jerome Powell to rule out a pre-emptive rate cut to blunt the impact of tariffs on the US economy.

The upshot was a modest retreat in the Straits Times Index, which fell 0.4 per cent, or 17.15 points, to 3,848.22. Across the broader market, losers outnumbered gainers 262 to 226 on trade of 1.1 billion securities worth $1.5 billion.

Mapletree Logistics Trust led the STI losers, falling 4.4 per cent to $1.08, while Venture Corp was the top gainer, rising 0.9 per cent to $11.07.

The local banks were mixed. DBS Bank rose 0.8 per cent to $43.09 after reporting better-than-expected first-quarter results, UOB added 0.2 per cent to $34.55, while OCBC Bank fell 0.7 per cent to $16.16.

The decline here was out of step with Wall Street overnight, where the three key indexes all rose on the interest rate decision.

The S&P 500 added 0.4 per cent, the Dow Industrials advanced 0.7 per cent and the tech-focused Nasdaq gained 0.3 per cent.

It was much the same elsewhere: Japan’s Nikkei and Hong Kong’s Hang Seng added 0.4 per cent, while Seoul’s Kospi and Australian shares both gained 0.2 per cent.

OCBC managing director for investment strategy Vasu Menon said the Fed decision means equity investors cannot expect support from a US rate cut until there is greater clarity about trade negotiations and the impact of tariffs.

Investors are focused on President Donald Trump’s trade policies and the effect they will have on the US and global economy, he added, noting that this is likely to be the key driver of the local bourse for now. “Irrespective, Singapore’s stock market is attractively valued, and the local markets should enjoy valuation support,” Mr Menon said.

THE BUSINESS TIMES