Singapore stocks slump alongside those in regional markets as Fed prepares for taper
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The benchmark Straits Times Index tumbled 1.4 per cent or 44.47 points to close at 3,086.97 on Aug 19, 2020.
PHOTO: ST FILE
Uma Devi
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SINGAPORE (THE BUSINESS TIMES) - The local market turned into a sea of red on Thursday (Aug 19) as investors took fright at indications by the United States Federal Reserve that it could begin gradually winding down its large-scale financial support, a process known as tapering.
That worrying prospect sent the benchmark Straits Times Index (STI) tumbling 1.4 per cent or 44.47 points to close at 3,086.97.
It was no surprise that losers easily outgunned gainers 402 to 150, with 1.79 billion securities worth $1.48 billion changing hands. It was also no surprise that all 30 STI constituents ended the day lower.
Oanda senior market analyst Jeffrey Halley noted that although caution was expressed about the potential impact of the Delta coronavirus variant on the economic recovery, most of the discussion on tapering appeared to be around the timing.
"Views were split over starting into the end of the year or early next," he said.
"That seems to be rather splitting hairs to me as to whether tapering commences in the late fourth quarter or early first quarter, which makes little difference. The fact is, Fed tapering looks likely to start in a few months."
Markets around the region took a hit as well. The Nikkei 225 lost 1.1 per cent and the Hang Seng Index was down 2.1 per cent, while the KLCI shed 0.7 per cent and the Kospi fell 1.9 per cent.
The biggest STI loser here was Jardine Matheson Holdings, which lost 2.2 per cent to US$55.41.
The trio of local lenders were also among the top decliners. DBS Bank fell 1.6 per cent to $29.92, and UOB slipped 1.5 per cent to $25.68, while OCBC Bank lost 1 per cent to $11.66.
Watch-listed Shenshan, which was formerly Dukang Distillers, was the top advancer. The counter rose 30.4 per cent to 30 cents.
SingHaiyi was the most actively traded counter, with some 234.4 million shares changing hands. The stock ended the day unchanged at 9.3 cents.
Other heavily traded counters included Sembcorp Marine, Jiutian Chemical and Yangzijiang Shipbuilding.
