STI dips 0.7% as index stocks are hit by MSCI impending exclusion

SINGAPORE – The decision to remove five blue-chip stocks from a key market benchmark sent local shares down on May 15.

The bourse was one of the worst-performing gauges in the region after news that Seatrium, City Developments, Jardine Cycle & Carriage (Jardine C&C), Mapletree Logistics Trust (MLT) and Mapletree Pan Asia Commercial Trust will leave the MSCI Singapore Index from May 31.

The Straits Times Index (STI) fell 23.9 points, or 0.7 per cent, to 3,289.42 in response, with Seatrium, Jardine C&C and MLT among the worst-performing counters.

Seatrium declined 11.7 per cent to $1.59, Jardine C&C dropped 4.3 per cent to $26.81, and MLT slid 3.7 per cent to $1.31.

Only eight of the STI’s 30 component stocks ended flat or higher. Gainers trailed decliners across the broader market 184 to 217, with 1.1 billion shares worth $1.3 billion traded.

The local issues largely drowned out another bumper session on Wall Street overnight, with key indexes trading around record levels as investors eyed data on inflation and second-guessed the Federal Reserve’s interest rate moves.

Few saw any reason to tone down the optimism, sending the tech-heavy Nasdaq up 0.8 per cent to a record, the first since April 11. The S&P 500 added 0.5 per cent to get within a smidgeon of a new high, while the Dow Jones Industrial Average gained 0.3 per cent.

The regional showing was mixed, with Shanghai shares down 0.8 per cent after the US slapped stiff new tariffs on US$18 billion (S$24.3 billion) of Chinese imports. Bourses in Hong Kong and South Korea were closed for public holidays. Miners drove the ASX 200 in Sydney up 0.4 per cent.

IG market analyst Yeap Jun Rong said a lower greenback and US bond yields overnight may bring some relief for risk sentiment across the region. The US dollar slid as expectations for impending rate cuts stays unchanged.

THE BUSINESS TIMES