Analyst says strengthened greenback has created overhang in risk sentiment across Asia
SINGAPORE stocks fell on Monday (Jan 13) as investors digested stronger-than-expected US employment numbers, which dimmed interest-rate-cut expectations.
The Straits Times Index (STI) fell 0.3 per cent or 9.86 points to 3,791.70. Across the broader market, losers beat gainers 349 to 193, with 949.7 million securities worth S$1 billion having changed hands.
Regional markets were also a sea of red on Monday. Both the South Korean Kospi and Hong Kong’s Hang Seng Index shed 1 per cent, and the Kuala Lumpur Composite Index fell 1.1 per cent.
IG market strategist Yeap Jun Rong said that the greenback strengthened on strong US economic data released on Friday, which created an overhang for risk sentiment across Asia.
He added that US 10-year treasury yields rose as strong US labour data and robust services Purchasing Managers’ Index data caused investors to push expectations for Federal Reserve rate cuts further into the future.
“Current projections indicate a single rate cut in July 2025, with no additional cuts anticipated through the year-end,” he said, adding that yields above 4.5 per cent have historically weighed heavily on risk sentiment.
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Furthermore, he noted that US retail sales data, set to be released on Thursday, could show further consumer resilience, given that the data point has consistently outperformed expectations since June 2023.
On the STI, Singtel was one of just four gainers on the index. It rose 1.6 per cent or S$0.05 to S$3.12.
Thai Beverage led the index’s losses, falling 2.7 per cent or S$0.015 to S$0.535.
Local banks were also in the red. UOB shed 0.1 per cent or S$0.02 to S$36.80, while DBS fell 0.1 per cent or S$0.06 to S$44.07, and OCBC declined 0.8 per cent or S$0.13 to S$16.97.
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