Fed meeting casts shadow on bourses, STI ends day 12 points lower

The Singapore Exchange building.

SINGAPORE - Singapore stocks continued to see pressure for the second straight day on Wednesday, as traders steered clear of risk ahead of the United States Federal Open Market Committee (FOMC) meeting.

The benchmark Straits Times Index (STI) slid 12.02 points, or 0.39 per cent to 3,040.51.

Overall trading on the exchange was thin, with 1.02 billion shares worth S$825.7 million changing hands.

Markets elsewhere in the region mostly fell into the red as well, taking their cue from Wall Street, which dropped 0.24 per cent overnight on mixed earnings reports.

Shanghai fell 1.72 per cent, dragged down by concerns that China's slowing economy was weighing down on profit margins and encouraging bad loans, while Hong Kong slipped 0.8 per cent.

Tokyo bucked the trend with a 0.67 per cent rise, backed by brisk earnings reports.

"Markets are keeping a low profile ahead of the FOMC, with investors cutting risk from their portfolios," noted IG market strategist Bernard Aw.

"To be sure, chances of a rate move in the meeting is extremely remote," he added.

"It is widely expected to be a non-event for financial markets, as a combination of soft inflation and recent economic data dented the policymakers' confidence to hike interest rate."

At home, the losses were led by the three local banks.

OCBC shaved eight cents or 0.86 per cent to S$9.20, after reporting a net profit of S$902 million for the third quarter to Sept 30, down 27 per cent from the same period a year ago, where its earnings were higher due to a one-off gain.

DBS Group lost 0.27 cents or 1.52 per cent to S$17.45, while United Overseas Bank fell 0.27 or 1.33 per cent to S$20.

Ascendas Real Estate Investment Trust (Reit) was also among the day's laggards, losing seven cents or 2.79 per cent to S$2.44.

On the other side of the ledger, rigbuilders Sembcorp Marine and Keppel Corporation made a good showing, even as oil prices show little signs of improvement.


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