LOCAL shares ended the last trading day of the week in the red, as hawkish cues from the US Federal Reserve hit trader sentiment. Observers warn that the recent bull run noted in equity markets around the world is showing signs of waning.
The benchmark Straits Times Index (STI) shed 0.2 per cent or 6.06 points on Friday (May 24) to close at 3,316.56. Across the broader market, daily turnover came in at 1.3 billion securities worth a collective S$1 billion. Decliners for the day trounced advancers 335 to 271.
Other bourses in the region ended the day lower, echoing sentiments in the local stock market. The Nikkei 225 fell 1.2 per cent, the Hang Seng Index slipped 1.4 per cent, and the Bursa shed 0.6 per cent. The Kospi and ASX 200 gave up 1.3 per cent and 1.1 per cent, respectively.
Barnabas Gan, acting group chief economist at RHB Bank, said the latest minutes from the Federal Reserve meeting showed “a severe lack of progress” towards the committee’s inflation objective of 2 per cent.
Market swap pricing may indicate two federal funds rate cuts this year, but the reality is likely one or zero cuts for the rest of this year, he said.
He added that higher-for-longer interest rates will mean global interest rates will stay elevated for the rest of the year, with “clear implications” for average mortgage rates in the US and certain countries in Asean.
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The biggest constituent loser by value on Friday was Jardine Matheson Holdings : J36 0%, which gave up 0.7 per cent or US$0.25 to close at US$38.20.
Sembcorp Industries : U96 0% was another top decliner, shedding 2.3 per cent or S$0.12 to finish at S$5.07.
Jardine Cycle & Carriage : C07 0% was the top index gainer, rising 0.9 per cent or S$0.24 to S$27.55 on a cum dividend basis.
The trio of local lenders, meanwhile, ended the day mixed. DBS : D05 0%was up 0.1 per cent or S$0.02 to S$35.87, while OCBC : O39 0%fell 0.3 per cent or S$0.04 to S$14.45. UOB : U11 0%traded flat at S$30.55.
