STI tumbles 1.2% on US tech rout, inflation worries

The Straits Times Index tumbled 38.14 points or 1.20 per cent to 3,144.27. PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Singapore shares fell for the second straight day alongside losses across most Asian bourses on Tuesday following a tech rout on Wall Street and inflation concerns on the back of a commodity-based rally.

The key Straits Times Index tumbled 38.14 points - the biggest fall in nearly four months - or 1.20 per cent to 3,144.27.

Except for China which closed higher, key gauges in Japan, Hong Kong, South Korea and Australia plunged between 1 and 3 per cent.

Malaysia slipped 0.4 per cent while Taiwan fell 3.8 per cent, suffering its third-largest fall in history.

Analysts and traders said Tuesday's tech sell-off was mainly due to lingering worries over anti-monopoly regulations and a tech correction in the US stock market.

Investors took little comfort from reassurances from the US Federal Reserve and a miss in US' employment report in April and chose to focus on surging prices which they worry could prompt central banks to turn hawkish.

Therefore, the soon-to-be released US CPI (consumer price inflation) and PPI (producer price index) figures this week will be of focus, with investors' belief of a "transient" rise in inflation put to the test, remarked IG's market strategist Yeap Jun Rong. He expects inflation worries to weigh on growth stocks such as tech given that much of their value stems from future earnings.

"Inflationary concerns will dominate the focus this week, but the base effects are widely priced in and this upcoming reading will likely only serve as a baseline," said Oanda strategist Edward Moya.

Latest data out of China which signalled surging factory prices on the back of a commodity rally added to the global inflation risk outlook. Rising Covid-19 cases in some parts of Asia, namely in India and Malaysia, added to the jitters.

Turnover on the local bourse came in at 2.17 billion units worth S$1.72 billion. Across the broader market, decliners outnumbered advancers 353 to 173. Losses were led by Singapore's banking trio.

Additional information from AFP

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