STI tracks regional decline as hopes dim for Fed policy pivot

Singapore stocks closed lower on Monday, mirroring regional declines, after a robust US jobs report last Friday dampened investors' hope of a policy pivot by the United States Federal Reserve.

The key Straits Times Index (STI) fell 1.2 per cent, or 38.34 points, to close at 3,107.47, with nearly all index counters ending the day in the red.

Thai Beverage led the decliners after its shares fell 3.4 per cent to close at 56.5 cents. The three local banks, DBS, OCBC and UOB, were also among the losers, falling between 0.8 per cent and 1.4 per cent.

Sats and Yangzijiang Shipbuilding were the only index counters in positive territory for the day.

Yangzijiang was the top STI gainer, up 2.5 per cent to $1.21. Some 80.7 million shares worth $95.8 million were traded, making it the most actively traded by value.

Across the broader market, decliners outpaced gainers 360 to 191 after 1.2 billion securities worth $960.4 million changed hands.

Markets in Japan and South Korea were closed for holidays, while key indexes in Hong Kong, Australia and Shanghai fell between 1.4 per cent and 3 per cent.

Mr Stephen Innes, managing partner at SPI Asset Management, said: "A robust US labour market and a Fed determined to push unemployment up leaves cross-asset risk sentiment vulnerable without an apparent near-term reprieve."

He noted that US Consumer Price Index (CPI) data set to be released on Thursday will be taking centre stage for investors.

"The real question for the market is whether one step down in core CPI will be enough to change the tone around inflation. Given the sharp increase in cross-asset correlations and breakdown in risk assets, it seems like that would be too much to hope for," he added.

Oil prices edged down after seeing their biggest weekly gain since March in reaction to a decision by the Organisation of Petroleum Exporting Countries and other major producers led by Russia to cut output by two million barrels a day.