SINGAPORE – Overnight losses on Wall Street following softer economic readings that sparked recession worries drove local investors to the sidelines on Thursday.

The wary mood after a day of optimism sent the Straits Times Index (STI) down 13.37 points or 0.4 per cent to 3,276.18, with half of the STI constituents in the red.

Gainers beat losers 274 to 239 on a turnover of 916.6 million shares worth $868.4 million.

The banking trio, which makes up over 40 per cent of the blue-chip barometer in terms of industry weightage, all registered declines. DBS was among the top STI losers, dropping 1.4 per cent to close at $34.53. OCBC slipped by 0.8 per cent to $12.59 while UOB dipped 0.4 per cent to $29.21.

Prime US Reit topped the chart as the best-performing Reit, with a 5.8 per cent jump to 45.5 US cents (60 Singapore cents).

This came after brokerage UOB Kay Hian initiated coverage with a “buy” call and a target price of 78 US cents, noting that the Reit “will benefit from a flight to quality”.

The United States reported sharper contractions in producer price index, retail sales and industrial production data on Wednesday, sending Wall Street into the red on recession concerns.

The S&P 500 index fell 1.6 per cent, the Dow Jones index slipped 1.8 per cent and the tech-heavy Nasdaq index retreated 1.2 per cent.

Meanwhile, the yields on the US two-year Treasury bill and the 10-year bond both fell by more than 10 basis points, but the lower risk-free rate still failed to boost the stock markets.

Wall Street’s woes got a mixed response among regional markets.

The Nikkei in Tokyo fell 1.44 per cent and the Hang Seng in Hong Kong slipped 0.12 per cent but Shanghai shares rose 0.5 per cent, as did the Kospi in Seoul.

Australian stocks were another winner on the day after a surprise fall in the number of people employed was seen as good for the local bourse, which advanced 0.6 per cent to a nine-month high. THE BUSINESS TIMES