STI falls as investors stay on sidelines due to inflation jitters

The Straits Times Index (STI) fell 0.3 per cent or 9.55 points to close at 3,227.53 points yesterday as sentiment wavered due to a faster-than-expected rise in Singapore's headline inflation. The consumer price index jumped 3.2 per cent year on year in October, crossing the 3 per cent mark for the first time since March 2013. This was higher than the Bloomberg median forecast of a 2.9 per cent rise.

UOB senior economist Alvin Liew said: "The higher October inflation print and the anticipation of further inflation pressures - which is no longer 'transitory' as previously thought - due to global and domestic factors, vindicates the tightened monetary policy stance by the Monetary Authority of Singapore in its October 2021 policy meeting... We keep our projection that another steepening in the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) gradient in April 2022 may be possible."

Losers beat gainers 262 to 191 in the broader market, with 1.88 billion shares worth $987 million changing hands. The top performer on the STI was CapitaLand Integrated Commercial Trust, which closed 1.8 per cent or 4 cents higher at $2.23. It was also the most heavily traded counter with 25.6 million units traded. At the bottom was Sembcorp Industries, which fell 2 per cent or 4 cents to $2.01.

DBS Bank fell 0.4 per cent or 14 cents to $32.39, OCBC Bank closed 0.4 per cent or 5 cents lower at $11.76, and UOB dropped 0.4 per cent or 11 cents to end at $27.60.

Most Asian markets also closed lower amid expectations that the United States Federal Reserve will tighten monetary policy quicker, following news that Mr Jerome Powell had been nominated by US President Joe Biden to run the Federal Reserve for a second term.

The Hang Seng Index slipped 1.2 per cent or 299.76 points to 24,651.58. The FTSE Bursa Malaysia Kuala Lumpur Composite Index fell 3.99 points or 0.3 per cent to 1,522.88.