Singapore stocks fall amid rise in Asian bourses; STI down 0.8%

SINGAPORE - Local stocks fell on Aug 12 amid a regional rally after intense market volatility last week.

The Straits Times Index (STI) fell 0.8 per cent, or 26.45 points, to 3,235.38. Across the broader market, gainers beat losers 322 to 231 after 1.1 billion securities worth $1.3 billion changed hands.

On the other hand, Asian stock markets were in the black.

South Korea’s Kospi increased 1.2 per cent, Hong Kong’s Hang Seng Index rose 0.1 per cent, Malaysia’s Kuala Lumpur Composite Index went up 0.7 per cent, and Indonesia’s Jakarta Composite Index gained 0.6 per cent.

SPI Asset Management managing partner Stephen Innes said markets have seemingly “caught their breath after the recent wild swings”.

He said markets are betting on 100 basis points of US interest rate cuts this year, with another 100 basis points lined up for next year.

“That’s a major shift in expectations, which has put the US dollar on notice,” he said.

Mr Innes added that while Bank of Japan officials have become “a bit jittery” after the central bank moved to normalise interest rates, he believes that they will “let the dust die” before making any moves.

“For now, it’s all about them sitting back and watching the Fed rate-cut show unfold,” he said.

Banks, whose net interest margins are sensitive to interest rate cuts, were mixed on Aug 12.

OCBC Bank shed 2.8 per cent to $13.83. UOB fell 2.4 per cent to $29.29 and DBS Bank gained 1.2 per cent to $33.98.

Yangzijiang Shipbuilding led losses on the STI, falling 4 per cent to $2.38.

DFI Retail Group was at the top of the table, rising 5.7 per cent to US$1.86.

THE BUSINESS TIMES