[SINGAPORE] Most stocks on the local bourse declined on Thursday (Aug 14), mirroring losses in regional markets, as investors anticipate a potential rate cut by the US Federal Reserve in the coming month.
The benchmark Straits Times Index (STI) fell 0.4 per cent or 16.24 points to close at 4,256.52. Across the broader market, losers outnumbered gainers 280 to 253 after 1.8 billion securities worth S$1.9 billion changed hands.
The top gainer on the index was Jardine Matheson Holdings, which rose 2 per cent or US$1.14 to US$58.51.
At the bottom of the index was ST Engineering, which slid 6.3 per cent or S$0.56 to S$8.40. This decline came despite the company reporting a 19.7 per cent increase in net profit to S$402.8 million for the first half of the year, up from S$336.5 million for the same period last year.
Singapore’s local banking trio ended mixed on Thursday. DBS fell 1.9 per cent or S$0.96 to S$50.49, while UOB was up 0.5 per cent or S$0.17 at S$36.36 and OCBC rose 0.7 per cent or S$0.11 to S$16.92.
Meanwhile, Chinese stocks were in a sea of red amid the ongoing tariff uncertainty, with Hong Kong’s Hang Seng Index falling 0.4 per cent and the Shanghai Composite down 0.5 per cent.
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While South Korea’s Kospi closed flat, other major regional indices ended lower as well. Japan’s Nikkei 225 lost 1.5 per cent, and the FTSE Bursa Malaysia KLCI was down 0.4 per cent.
These regional declines come amid growing expectations for the Fed to cut 50 basis points in September.
Josh Gilbert, a market analyst at eToro, highlighted that the recent release of US inflation data, which has fuelled expectations of a potential interest rate cut by the Fed, is a positive development for global markets.
“Interest rate cuts are usually good news for equity markets because we are probably going to see more capital flow back into markets,” he told The Business Times.
However, Gilbert also pointed out that the economy is showing signs of slowing down, with recent jobs data coming in weaker than expected. This could prompt the Fed to take action.
While some have called for more aggressive easing – such as US Treasury Secretary Scott Bessent, who is advocating for a 150 basis point cut to the Fed’s benchmark borrowing rates – Gilbert does not foresee this happening. Instead, he believes the Fed will continue its more measured approach, as it has done throughout the year.
“Markets are looking to see more cuts from the Federal Reserve, so there is a risk there that if we don’t get the number of cuts that markets are expecting, we could see markets slow down (slightly),” he noted.
