STI reverses two-day gain to end 0.93% lower

SINGAPORE (THE BUSINESS TIMES) - Local stocks snapped a two-day winning streak on Wednesday after a pull-back in United States Treasury yields sent tech stocks roaring back to life on Wall Street overnight.

The sell-off sent the benchmark Straits Times Index (STI) down 0.93 per cent or 28.81 points to 3,079.72 with losers outnumbering gainers 241 to 234 on trade of 2.91 billion shares worth $1.71 billion.

Technology company Frencken Group was among the top performers on the day, increasing 2.38 per cent to $1.29.

DBS Group Research said in a note that near-term downside for semiconductor stocks AEM Holdings, UMS Holdings and Frencken -which have been affected by the sell-off in tech stocks - are limited, and that the sector "should stage a rebound soon".

"There is limited upside for (the US 10-year Treasury yields)," it said, adding that the industry momentum "continues to be bullish with the ongoing shortage of semiconductor chips and US semiconductor equipment billings are on an uptrend".

Yangzijiang Shipbuilding emerged as top performer for the day among the STI constituents, gaining 4.55 per cent to $1.15.

On the other hand, DBS finished at the bottom of the index, sliding 3.5 per cent to end at $27.84.

The other two local lenders also ended the day in the red. UOB fell 1.32 per cent to $25.36 while OCBC closed down 1.1 per cent at $11.67.

Asian markets ended the day mixed.

The Nikkei 225 Index in Tokyo edged up 0.03 per cent, the Hang Seng in Hong Kong gained 0.47 per cent while South Korean shares closed lower for a fifth straight session, down 0.6 per cent.

Mr Stephen Innes, chief global market strategist at Axi, noted: "Stocks snap back on softer yields, but given the immense macro forces at play, a great day in Nasdaq is hardly a trend."