STI sheds 0.4% amid concerns about global economic issues

Local shares took a hit on the first trading day of the week, as investors kept a close eye on key global economic issues such as inflation rates, tensions in Taiwan and potential further interest rate increases by the US Federal Reserve.

On the Singapore bourse, the benchmark Straits Times Index shed 0.4 per cent, or 12.45 points, to end at 3,256.82.

Across the broader market, decliners inched past advancers 238 to 229. Daily turnover came in at just over 1.6 billion securities worth $1.1 billion.

Mr Song Seng Wun, an economist at CIMB, said all eyes are on the Fed's meeting tomorrow.

"Given that the weaker-than-forecast headline inflation was due mainly to lower pump prices and energy costs which offset increases in the sub-indices for food and shelter, it might be premature to declare that the Fed's fight to contain inflation is won, especially given the still-resilient US labour market," he said.

In Singapore, a number of top gainers were those which had announced an improvement in financial results recently.

Semiconductor player AEM was the top gainer, after reporting upbeat financial results last Friday, and said that it was on track for a "record year". The stock gained 5.5 per cent to $4.62 yesterday.

Investors also piled into Straits Trading after it declared a special dividend on the back of strong first-half results. The stock ended at $3.27, up 6.9 per cent.

City Developments, which swung into the black for the first half-year with a record $1.1 billion profit, added 1.3 per cent to $8.45.

Jardine Matheson Holdings was the biggest loser, shedding 2.1 per cent to US$50.13. Jardine Cycle & Carriage was another top decliner, falling 1.9 per cent to $30.61.

Sembcorp Marine was the most actively traded counter, with some 248.3 million shares changing hands. The counter closed at 10.7 cents, down 3.6 per cent.