Bulls And Bears

STI plunges ahead of release of Fed minutes

Other Asian markets also hit by jitters, with focus on US' rate hike policy

The Singapore bourse was awash in red yesterday, with markets jittery ahead of the release of the United States Federal Reserve's meeting minutes.

The benchmark Straits Times Index plunged below the 3,500 mark, losing 46.91 points, or 1.32 per cent, to 3,496.27. An afternoon recovery did not last long, with traders back from their mid-day break to discover lower-than-forecast inflation data for April.

Losers trounced gainers 307 to 156 overall, with 1.36 billion shares traded for a value of $1.33 billion.

The Fed minutes, due at 2am today (Singapore time), will be scrutinised for clues to US policymakers' thinking on interest rate changes.

On the Singapore front, ANZ economists Sanjay Mathur and Eugenia Fabon Victorino wrote: "At this point, core inflation has averaged 1.5 per cent year-on-year in the year to date. Henceforth, wages and domestic demand by implication will need to accelerate substantially to generate robust price pressures and justify further tightening by the Monetary Authority of Singapore in October."

Meanwhile, the hope from last week's US-China trade talks is fast fading. US President Donald Trump seemed to contradict an official's earlier statement that a trade war was "on hold", saying he was "not satisfied" with the state of affairs.

Wall Street saw indices dipping overnight, and IG Asia market strategist Pan Jingyi said "the soiled risk sentiment points to synchronised declines" in Asia too.

Shanghai fell by 1.41 per cent and Tokyo by 1.18 per cent, while Hong Kong lost 1.82 per cent. Seoul, though, inched up by 0.26 per cent.

At home, Singtel pulled down the index, slipping six cents, or 1.77 per cent, to $3.34, with 47.8 million shares changing hands. StarHub fell six cents, or 2.79 per cent, to $2.09.

Casino operator Genting Singapore saw heavy trade as well, losing four cents, or 3.05 per cent, to $1.27, on a churn of 37.6 million shares.

Singapore Exchange (SGX) shed nine cents, or 1.2 per cent, to $7.39, amid a legal tussle between the bourse operator and its Indian counterpart over planned India equity derivatives. All eyes are on the Bombay High Court's decision.

Cord-blood banker Cordlife Group fell by seven cents, or 7.96 per cent, to 81 cents. It has drawn SGX attention over its price movements after the counter rose by 28 per cent on Monday, then fell 7.4 per cent the next day. Cordlife disclosed in response to the query that it is in talks over "corporate development opportunities".

A version of this article appeared in the print edition of The Straits Times on May 24, 2018, with the headline 'STI plunges ahead of release of Fed minutes'. Print Edition | Subscribe