The Singapore stock market experienced a decline on Friday, effectively ending a two-day rally that had seen the Straits Times Index (STI) climb nearly 60 points or 1.4 percent. As of the market close, the STI stood just below the 4,350-point mark, showing signs of potential further decreases as concerns linger into the start of next week.
Global outlook for Asian stocks appears grim, heavily influenced by geopolitical tensions in the Middle East, which are expected to exert pressure on market sentiments. Following a mostly lower performance in European and U.S. markets, Asian indices are anticipated to open similarly downcast.
On Friday, the STI saw a reduction of 11.58 points or 0.27 percent, concluding the day at 4,344.24 after experiencing fluctuations within the 4,339.69 to 4,375.33 range. The slight decline was attributed primarily to losses in the financial and telecommunications sectors, which were somewhat cushioned by increases in property stocks and industrials.
Among the active players in the market, CapitaLand Ascendas REIT and Mapletree Pan Asia Commercial Trust both gained 0.71 percent, while CapitaLand Integrated Commercial Trust followed closely with a rise of 0.68 percent. CapitaLand Investment saw an increase of 0.36 percent, and City Developments was up by 0.89 percent. On the downside, DBS Group experienced a notable drop of 1.48 percent, with other losses seen in DFI Retail Group, which fell 0.60 percent, and SingTel, down 0.23 percent. Notably, Yangzijiang Financial surged by 7.41 percent, highlighting the specific sector variability within the market.
The preceding session on Wall Street provided mixed signals, with the major averages varying in performance. The Dow Jones Industrial Average fell by 273.78 points or 0.59 percent, closing at 45,834.22. In contrast, the NASDAQ added 98.03 points or 0.44 percent to finish at 22,141.10, while the S&P 500 slipped marginally by 3.18 points or 0.05 percent to conclude at 6,584.29.
Reviewing the week, both the NASDAQ and S&P 500 enjoyed upward movements, increasing by 2.0 percent and 1.6 percent respectively, while the Dow also posted a gain of 1.0 percent. This mixed performance came as traders turned their focus towards the Federal Reserve’s upcoming monetary policy meeting on Wednesday. With inflation showing signs of being relatively contained and the labor market displaying weakness, analysts predict a probable rate cut of at least 25 basis points.
Attention is expected to pivot towards the Fed’s statement and Chair Jerome Powell’s comments post-meeting, where future rate cuts may be contingent upon incoming economic data. Current anticipations suggest a potential 25 basis point cut in both October and December meetings.
In the backdrop, crude oil prices experienced an uptick, attributed to ongoing supply-side concerns due to the escalating Russia-Ukraine conflict and emerging tensions in the Middle East. West Texas Intermediate crude for October delivery rose by $0.31 or 0.50 percent, landing at $62.68 per barrel.
On the local front, Singapore is poised to release its Q2 unemployment data, with predictions indicating a slight increase in the jobless rate to 2.1 percent from the previous quarter’s 2.0 percent rate.
