STI slips 0.3% amid heavy selling of SIA shares

SINGAPORE – Local stocks dipped for the third straight session on July 29, with more losers than gainers amid heavy selling of Singapore Airlines’ shares.

The national carrier was the biggest blue-chip decliner, sinking 7.4 per cent or 56 cents to $7.04 as 38.5 million shares were transacted. Its weak first-quarter net profit led analysts to downgrade their calls and slash price targets for the counter.

The benchmark Straits Times Index (STI) fell 0.3 per cent or 11.73 points to end at 4,229.41. Across the broader market, losers beat gainers 371 to 205, with around 1.9 billion securities worth $1.7 billion changing hands.

Jardine Matheson was the top blue-chip gainer, advancing 2.2 per cent or US$1.22 to US$56.54.

The trio of local banks fell. DBS Bank declined 0.1 per cent or six cents to $48.60, OCBC Bank closed 0.4 per cent or six cents lower at $17.04. UOB shed 0.3 per cent or 10 cents to end at $36.80.

Despite the recent declines, Julius Baer said it is positive on Singapore equities due to the authorities’ ongoing efforts to boost liquidity. This includes the implementation of programmes that sharpen companies’ focus on shareholder value.

“These measures are similar to recent initiatives launched in Japan and South Korea, and we are optimistic that successful reforms could drive another leg of a re-rating,” Ms Chua Jen-Ai, Asia equity research analyst at the Swiss bank, said in a report distributed on July 29.

Investor sentiment is also more cautious, with the focus now on the announcement of key data and earnings, as optimism sparked by recent US trade deals dissipates.

The main event this week is the US Federal Reserve’s interest rate decision, as the Federal Open Market Committee’s (FOMC) two-day meeting begins on July 29. Fed chair Jerome Powell is under intense pressure from President Donald Trump to cut borrowing costs and could face dissent from officials who want to shore up a slowing labour market.

Still, the US central bank is widely expected to leave its benchmark rate unchanged, preferring to await more data that could shed more light on the impact of tariffs on consumer prices.

“But the FOMC will face further pressure this year if tariffs cause stagflation – as we expect with inflation above 3 per cent, unemployment rising from 4.1 per cent and recession risks increasing,” said Mr Mansoor Mohi-uddin, chief macro strategist at Bank of Singapore. “We thus think the Fed will make one rate cut before the end of 2025.”

Apart from the FOMC meeting, the US is slated to announce the advance second-quarter gross domestic product growth and core personal consumption expenditure data on Jul 30. Monthly employment figures are expected on Aug 1.

There is also a string of earnings from the big US tech companies including Apple and Microsoft.

The rest of Asian markets were mixed. Japan’s Nikkei 225 continued its descent, closing 0.8 per cent lower. Hong Kong’s Hang Seng Index fell 0.2 per cent, while Malaysia’s KLCI was little changed. The bourses that advanced included Indonesia’s Jakarta Composite Index, which gained 0.7 per cent, and South Korea’s Kospi, also higher by the same margin.

THE BUSINESS TIMES