STI up 0.3% amid a mixed regional showing; ST Engg shares at a 52-week high

SINGAPORE - The Straits Times Index (STI) rose 0.3 per cent or 9.69 points to 3,313.35 on May 14, amid cautious trading ahead of the release of US inflation figures mid-week. Regional bourses ended mixed.

The consumer price index and producer price index are expected to play a crucial role in shaping the outlook for Federal Reserve policy, contributing to the market’s cautious stance, said Mr Stephen Innes, SPI Asset Management’s managing partner.

Investors are particularly sensitive to the inflation data, given its potential to influence interest-rate decisions and the broader market sentiment. Therefore, market participants are likely to tread carefully, awaiting clearer signals from the inflation figures before making significant moves, he said.

This week’s data dump wags two significant tail risks: one tied to warmer inflation concerns and the other linked to slower economy activity, raising fears of stagflation. In either scenario, the market response could be unfavourable. Investors have thus remained cautious, as either outcome could trigger a broader stock market sell-off.

“You wouldn’t want to find yourself in a crowded index theatre with investors screaming about inflation or stagflation while dashing for the fire exits,” said Mr Innes.

Singapore Technologies Engineering shares hit a 52-week high at $4.20, up 4.2 per cent, a day after the group delivered an 18.1 per cent rise in revenue to $2.7 billion, and bagged $3 billion in new orders for the first quarter to March. The STI’s best performer’s financial showing was within the expectations of analysts.

The shares of semiconductor equipment manufacturer UMS Holdings fell 4.5 per cent to $1.06, after plunging 15.9 per cent on Monday on the back of its first-quarter net profit’s decline of 44 per cent to $9.8 million.

Across the broader market, gainers beat decliners 357 to 225. Market turnover was 1.21 billion shares worth about $1.2 billion.

THE BUSINESS TIMES