Traders in wait-and-watch mode as BoJ, Fed decisions loom, STI ends 3 points up

SINGAPORE - Singapore equities hardly moved on Tuesday as traders waited on the sidelines for policy decisions from the United States and Japan.

The local Straits Times Index (STI) inched up just 2.55 points, or 0.09 per cent, to 2,854.69. Turnover across the bourse amounted to 1.4 billion shares worth S$927.8 million. This was much like Wall Street, which shed 0.02 per cent on Monday (Sept 19).

Markets globally have been pricing in a lower chance of a rate hike being announced at the US Federal Reserve's meeting on Tuesday, though it is expected to hold clues as to the timing of the next one.

Much attention is also on the Bank of Japan's (BoJ) review - held  on Tuesday as well - which could see the central bank step up its monetary stimulus and cut interest rates further into negative territory, said an ABN Amro note.

The same air of caution was similarly seen in other markets in the region: Tokyo slid 0.16 per cent on a stronger yen as it reopened after a holiday, while Shanghai eased 0.1 per cent and Hong Kong dipped 0.08 per cent.

"Traders tend to take fewer risks ahead of central bank meetings," said Ms Margaret Yang, market analyst at CMC Markets.

But she added that both decisions from the US Fed and BoJ, which will set the tone in financial markets, could "potentially bring a lot of volatility".

The STI's performance was propped up in part by two of the local banks. United Overseas Bank put on 17 cents or 0.9 per cent to S$18.98, while DBS Group Holdings climbed 8 cents or 0.5 per cent to S$15.27. OCBC Bank, on the other hand, pared 1 cent or 0.1 per cent to S$8.60.

Lower oil prices likely put a dent in oil and gas-related plays, with Sembcorp Industries losing 3 cents or 1.1 per cent to S$2.58. Keppel Corporation erased earlier losses to finish 1 cent or 0.2 per cent higher at S$5.27.

Penny stocks continued to dominate most of the action on the exchange.