Singapore stocks fall after US inflation dashes Fed rate-cut hopes; STI down 0.1%

IT WAS no bed of roses for Singapore shares on Wednesday (Feb 14), which took their cue from Wall Street’s overnight losses after US inflation turned out stickier than expected.

The Straits Times Index (STI) finished slightly lower at 3,139.07 – down 2.8 points or 0.1 per cent – as the hotter-than-expected US consumer price index (CPI) for January underscored persistent inflationary pressures, dashing hopes of the Federal Reserve cutting rates sooner.

Stephen Innes, managing partner at SPI Asset Management, said: “The persistence of price pressures in the world’s largest economy shouldn’t surprise.

“With the labour market expanding, consumer spending robust, and consumer sentiment rebounding sharply since November, coupled with soaring existing home prices, it would be unexpected if inflation didn’t increase again… However, many were caught off guard and in denial this time.”

Key gauges from Japan, South Korea, Malaysia and Australia all recorded losses, while Hong Kong stocks finished higher after they resumed trading following the Chinese New Year holiday.

Across the broader market in Singapore, turnover on Wednesday stood at 1.4 billion securities worth S$1.23 billion. Decliners outnumbered advancers 282 to 270. Losses were led by Jardine Matheson Holdings : J36 0% and Jardine Cycle & Carriage : C07 0%.

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Banking stocks fared mixed. DBS : D05 0% rose S$0.08 or 0.3 per cent to S$32.57, and UOB : U11 0% gained S$0.10 or 0.4 per cent to S$28.32. OCBC : O39 0% closed unchanged at S$12.95.

Rex International : 5WH 0%, the day’s second-most actively traded counter with 48.9 million shares done, fell S$0.016 or 11.1 per cent to S$0.128.

This came after the group said that, based on a preliminary review, it is expected to report a net loss for FY2023.

The upstream energy player cited non-cash items related to impairment of goodwill, oil and gas properties and exploration and evaluation assets for the losses. Rex is set to release its results on or before Feb 29.

Singapore Airlines : C6L 0% extended Tuesday’s spectacular gains, ending S$0.05 or 0.7 per cent higher at S$7.14 on Wednesday. The airline will give its third-quarter business update for the period ended December 31, 2023, on Feb 20.

In a report issued last month, CGS-CIMB Research said it had recognised SIA’s strong revenue dynamics over the second half of FY2024. However, the big surprise was the airline’s strong cargo performance in the closing of 2023 based on its operating results released a month earlier.

The moderation in jet fuel costs is another upside, the house pointed out.