STI tumbles a further 1.4% amid calls for Fed rate cuts
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The STI was down a further 1.4 per cent or 45.23 points to close at 3,198.44 points, after plunging 4.1 per cent a day ago.
ST PHOTO: KUA CHEE SIONG
Tay Peck Gek
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SINGAPORE - Singapore was left out from the rebound played out elsewhere in Asia-Pacific markets on Aug 6, a day after the global meltdown that saw Tokyo’s Nikkei 225 diving 12.4 per cent.
The Straits Times Index (STI) was down a further 1.4 per cent or 45.23 points to close at 3,198.44 points, after plunging 4.1 per cent a day earlier.
Job numbers that caused markets to worry about an impending recession in the US have given rise to calls for the Federal Reserve to cut rates now to support the world’s largest economy.
Nobel prize-winning US economist Paul Krugman was one of them, writing on social media platform X: “I wasn’t calling for an inter-meeting cut, because that might signal panic. But since we may be seeing a panic anyway, that argument loses its force. Real case for an emergency cut soon.”
Cutting policy rates bodes well for the equity market but squeezes interest margins for banks. The STI, being heavy with banking counters, was dragged down as a result.
UOB closed 1.7 per cent or 50 cents lower at $29.58, making it the worst-performing banking counter among the trio on the benchmark. DBS closed 52 cents or 1.6 per cent down at $32.75, while OCBC fell 18 cents or 1.3 per cent to $13.84.
CapitaLand Ascott Trust closed 1.15 per cent or 1 cent lower at 86 cents, after the stapled group’s announcement of a $165 million sustainability-linked, multi-currency revolving credit facility for general corporate purposes.
Gainers beat decliners 298 to 289 across the broader market, as about 1.4 billion securities transacted at nearly $2 billion in total value.
Bourses elsewhere took comfort from the higher-than-expected US services purchasing managers’ index released overnight as the data indicated a lower increase in economic activity rather than a recession.
The CBOE Volatility Index, or the VIX – commonly regarded as the market’s “fear index” – dipped 11.2 per cent over Asian trading hours, after rocketing 100 per cent on Aug 5. THE BUSINESS TIMES
