STI slips 0.55%, tracking overnight losses on Wall Street

Local shares buckled under selling pressure following overnight losses on Wall Street over fears of more aggressive rate hikes by the United States Federal Reserve.

The Straits Times Index (STI) slipped 0.55 per cent to 3,221.67 yesterday, after US stocks logged their third straight day of losses on more hawkish posturings by Fed officials as fears heightened over a slowing global economy.

Around 2.06 billion shares worth $1.89 billion changed hands, with losers beating gainers 269 to 251.

China's latest purchasing managers' index showed factory activity extending its decline last month owing to Covid-19 curbs, its property crisis, and the worst heatwaves in decades.

Stock markets in Japan, mainland China and Australia fared none the better, closing lower, while indexes in Hong Kong, Taiwan, South Korea and Malaysia finished higher.

The mixed showing comes ahead of key inflation data set to be released by the euro zone, which most expect to be worrisome and will pile on recession woes.

Geopolitical tensions add to the bulging bucket of worries. Tensions between China and Taiwan remain a headwind, with Taiwan firing warning shots at a Chinese drone for the first time.

"While further escalation could be the less likely scenario, the lingering uncertainty of potential retaliation could still drive some paring of risks until greater clarity is presented," said IG market strategist Yeap Jun Rong.

Keppel Corp climbed following news that its infrastructure arm is developing Singapore's first hydrogen-ready power plant, which will cost $750 million.

The counter closed at $7.27 after gaining 1.11 per cent.

China Everbright Water said it has bagged a 30-year concession deal for a wastewater treatment plant in Linyi city in Shandong province. The stock finished the day at 27.5 cents, up 3.77 per cent.