Bulls And Bears

STI in the red amid caution over inflation, rate hike fears

Benchmark index falls 0.2% to 3,221.52 * Luxury watch retailers Cortina and Hour Glass shine * DBS biggest decliner after being hit by access glitch

Local shares ended in the red yesterday as traders took a cautious approach given the various minefields confronting them, from inflation to faster interest rate rises by the United States Federal Reserve.

The benchmark Straits Times Index fell 0.2 per cent or 5.63 points to end at 3,221.52. Turnover came in at 1.3 billion shares worth $944.7 million with losers outpacing gainers 235 to 208.

Mr Vishnu Varathan, head of economics and strategy at Mizuho Bank, said the "smoking guns" for a distinctly more hawkish turn at the Fed's December meeting - namely in terms of quicker tapering and rate hikes - were "strewn all over the place". However, he warned that investors should pay attention to the details: "(An) inflation run-up accentuated by pandemic snags and spending patterns, even with some lingering reflation elements, will only trigger a front-loading of rate hikes."

Across the region, markets were generally mixed. The Nikkei 225 rose 0.7 per cent, while the Hang Seng Index and Jakarta Composite Index each added 0.2 per cent. The Kospi lost 0.5 per cent and the KLCI shed 0.3 per cent.

Luxury watch retailers Cortina Holdings and The Hour Glass were among the top gainers on the local bourse. Cortina added 6.1 per cent to $4.35 while The Hour Glass rose 9.1 per cent to $2.29.

Tech play AEM was another top advancer, up 2.6 per cent to $5.08.

DBS was the biggest decliner, shedding 0.8 per cent to $32.11 after problems with its website and mobile app prevented customers from accessing banking services for about two days.

Hongkong Land, a member of the Jardine group, was another big loser yesterday, slipping 1.2 per cent to close at US$5.63.

HGH Holdings was the most heavily traded counter with 54.1 million shares changing hands.

Other actively traded counters included Sembcorp Marine, Hatten Land and Singtel.

A version of this article appeared in the print edition of The Straits Times on November 26, 2021, with the headline 'STI in the red amid caution over inflation, rate hike fears'. Subscribe