STI edges down 0.1% on Monday, bucking regional trend

Across the broader market, advancers outnumber decliners 319 to 240 after 1.7 billion shares worth S$1.4 billion change hands

The Straits Times Index (STI) inched lower on Monday (Aug 15), bucking regional indices.

The STI closed down 0.1 per cent or 5.82 points to 4,338.42.

Across the broader market, advancers outnumbered decliners 319 to 240 after 1.7 billion shares worth S$1.4 billion changed hands.

Hongkong Land was the top gainer on the STI, closing up 3 per cent or US$0.19 at US$6.61.

The biggest loser was Singtel, which ended down 0.9 per cent or S$0.04 at S$4.30.

The trio of local banks closed lower on Monday, as the market prices in a rate cut by the Fed. DBS closed down 0.8 per cent or S$0.39 at S$51.40. UOB dropped 0.1 per cent or S$0.04 to S$35.26 and OCBC closed 0.2 per cent or S$0.03 lower at S$16.82.

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Across the region, major indices closed higher. Kospi was up 0.4 per cent and the Nikkei 225 rose 0.9 per cent. Hong Kong’s Hang Seng Index closed up 0.2 per cent and the KLCI was up 1.1 per cent.

The recent string of weak US employment data means it is almost certain the Fed will cut rates by 25 basis points (bps) after its policy meeting ends on Thursday said Vasu Menon, managing director, investment strategy, OCBC. The rate cut is largely anticipated and discounted, and should not come as a surprise to the markets.

How the Fed will telegraph its intentions in dealing with concerns about stagflation will be closely analysed. It is still unclear if the Fed will remain cautious or will signal for two more 25 bps cuts this year to ward off weakness in the labour market.

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“With an abundance of liquidity on the sidelines and in the absence of a recession, Fed rate cuts could prove to be a tailwind for markets as history has often shown,” said Vasu.