STI closes flat as traders await key US inflation data

SINGAPORE shares on Tuesday (Feb 13) ended the first day of the holiday-shortened week on a flat note, with all eyes on the latest US inflation print that will shape market expectations for rate cuts by the world’s largest central bank.

The Straits Times Index (STI) rose 3.57 points or 0.11 per cent to 3,141.87, following Wall Street’s mixed showing overnight with the Dow pushing to a fresh record, ahead of the US’ January headline consumer price index set to be released on Tuesday night.

Expectations are for the disinflationary trend in the US to remain intact.

While higher-than-expected inflation figures could scale back market expectations for rate cuts and fuel the US dollar’s upside, a softer print will gladden markets.

Even so, investors may be too optimistic over the Fed’s potential rate cut trajectory, argue some economists.

DBS Group Research’s economics team said in a note: “We think some rate cuts are possible in the second half of 2024 if inflation remains well-behaved, but market pricing for at least 200 basis points in cuts in 2024-25 might be too optimistic. Growth would have to slow materially, perhaps driven by instability in the financial sector, for that to happen. No sign of such a scenario for now.”

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Elsewhere in the region, key gauges in Japan, South Korea and Malaysia finished higher, while Australia bucked the trend. Markets in China, Hong Kong and Taiwan remained closed for the Chinese New Year holiday.

Turnover in the local bourse on Tuesday stood at 1.2 billion units worth S$1.2 billion. Advancers outnumbered decliners 211 to 154.

Singapore’s banking trio ended the day mixed, with DBS : D05 0% retreating 0.2 per cent to S$32.49, OCBC : O39 0% closing unchanged at S$12.95 and UOB : U11 0% rising 0.3 per cent to S$28.22.

Seatrium : S51 0%, Thai Beverage : Y92 0% and Singtel : Z74 0% were the day’s most actively traded counters.

ComfortDelGro’s : C52 0% announcement that its wholly owned unit has acquired a UK-based ground transport management and accommodation network specialist for £80.2 million (S$135.4 million) failed to stir excitement. Shares of the land transport giant fell S$0.01 or 0.7 per cent to S$1.39.

Straco : S85 0% jumped S$0.045 or nearly 10 per cent to S$0.51, after it guided last Friday that it expects to report a substantial net profit for FY2023, swinging into the black from the net loss reported in FY2022.

The tourism facilities operator said the stronger showing was due to higher revenue from the company’s China attractions in FY2023.