Singapore stocks sink after Powell signals higher inflation; STI down 0.7%

SINGAPORE – Local shares mirrored falls across global markets on June 19 amid concerns about sticky US inflation and growing unease over escalating tensions in the Middle East.

An air of pessimism set in for the trading day when US Federal Reserve chair Jerome Powell warned that consumers are expected to face higher prices due to the Trump administration’s proposed import tariffs. He also dampened hopes about impending interest rate cuts in coming months.

The downbeat messaging sent the benchmark Straits Times Index (STI) sliding 0.7 per cent or 26.63 points to 3,894.18 – its second straight negative session – with losers outpacing gainers 315 to 167 across the broader market on lacklustre trade of 980 million securities worth $933 million.

The top performer on the STI was conglomerate Jardine Matheson Holdings, up 0.9 per cent to US$46.26, while brewer Thai Beverage led the laggards, falling 3.2 per cent to 45 cents.

Red ink also washed over the local banks: DBS fell 0.7 per cent to $43.93; OCBC declined 0.3 per cent to $15.99; and UOB closed 0.3 per cent lower at $34.71.

Regional bourses ended mostly lower on the same concerns that were flagged here. Japan’s Nikkei 225 fell 1 per cent, Malaysian shares declined 0.7 per cent, Australia’s ASX slipped 0.1 per cent and Hong Kong’s Hang Seng tumbled 2 per cent. The Kospi in Seoul bucked the trend, adding 0.2 per cent.

Wall Street put on modest gains early in the session overnight but those gains were steadily trimmed back, leaving the three key indexes largely unchanged, although there is rising concern surrounding the security of oil supplies if the Middle East conflict affects shipping in the Strait of Hormuz.

Mr Suan Teck Kin, head of research at UOB Global Economics & Markets Research, said his team is still projecting three 25-basis-point rate cuts in the US – in September, October and December – and two cuts in 2026.

THE BUSINESS TIMES