Singapore shares fall on Thursday, weighed down by poor performance from local banks

SINGAPORE - Despite opening marginally higher on Thursday, the Straits Times Index ended the day 0.4 per cent lower at 3,363.68 points.

This contrasted with the

performance of Wall Street and most key Asian bourses,

which were buoyed by the United States Federal Reserve’s smaller rate hike and the Fed possibly stopping further rate increases soon.

The drop in Singapore share prices was due to a fall in the shares of the three local banks, which collectively account for over 40 per cent of the blue-chip barometer’s weighting.

DBS, UOB and OCBC ended the day in the red after

the US Federal Reserve hiked the federal funds rate by 25 basis points

to a target range of 4.5 per cent to 4.75 per cent on Wednesday.

This was the US central bank’s smallest adjustment to interest rates since March 2022.

The Fed had made a half-point increase in December 2022 and four 75 basis-point hikes before that.  

The banks have been beneficiaries of policy rate hikes by the Fed, with net interest margins rising in tandem with higher borrowing costs.

DBS led the fall on Thursday with a 2 per cent decline to $35.08. OCBC slid 0.8 per cent to $12.88, while UOB slipped 0.3 per cent to $29.63.

Other stocks on the local index that ended in the red on Thursday were Jardine Cycle & Carriage, ComfortDelGro Corporation, City Developments and Wilmar International.

Airport services company Sats was the day’s biggest gainer, rising almost 4 per cent to close at $3.15.

Other gainers were Mapletree Industrial Trust and DFI Retail Group – both went up by more than 1.8 per cent.