It was a nondescript market-trading day, as Singapore shares defied Wall Street's Friday rally to dip lower yesterday, with the Straits Times Index declining for the fourth consecutive session, this time by 13.85 points or 0.39 per cent to 3,498.29.
Market watchers remarked that the market here appears to be still weak and trading sideways, following the correction in late January to early last month. Some buying activity crept back at some points on valuation grounds, but gains were also quickly lost in subsequent days.
Remisier Desmond Leong said that "up moves may not be very strong if the US stock market continues to languish", with the Dow Jones yet to recover from its end-January plunge. All eyes now seem to be on the Fed meeting today and tomorrow, where the expectation is for a rate increase, as officials see better economic growth and an uptick in inflation as justification to continue interest rate normalisation.
In Singapore, losses were led by Jardine Strategic and Jardine Jardine Cycle & Carriage, but also the banks, with DBS Bank down 18 cents or 0.6 per cent to $28.07, OCBC Bank down 12 cents or 0.9 per cent to $13.18; and United Overseas Bank down 5 cents or 0.2 per cent to $28.10. All three local banks featured on the list of top 20 losers.
Remisier Charles Chua said: "The market seems to be waiting for the Fed to decide on which direction... to put the interest rate increase on hold until the next Fed meeting or to go ahead. In the interim, the market seems to be going nowhere."
While it is the rate-sensitive instruments such as real estate investment trusts (Reits) that should be affected, if the Fed decides to raise borrowing rates, a report by DBS Group Research yesterday claiming that Reit prices have bottomed lent the asset class a lift, albeit a slight one. The FTSE ST Reit index responded by inching up 0.1 per cent to 823.21.
Much of Asia showed the same uninspiring trading pattern, with key indices in Japan, South Korea, India, Thailand and Indonesia ending the trading day with slight retreats, while others such as Hong Kong, Shanghai and Australia reported flat to slight upward moves.
On the local bourse, 1.6 billion shares worth $939.8 million were traded. Losers outpaced gainers 307 to 128.
On stocks worth watching, Mr Leong said he is still paying attention to Creative Technology, which after a spectacular seven-fold price surge from $1.25 to $8.75 in a span of about 10 days, is now also trading sideways, closing 1.1 per cent lower at $6.55 yesterday.