The benchmark index has pared all of its earlier gains (3207 intraday high) and a lower close is on the cards as caution remains amid lingering worries over the impact of Chinese monetary tightening, and ahead of the FOMC meeting tomorrow in the U.S., analysts say.
Singapore shares ended lower in thin volume today as investors remained concerned about the prospects for economic growth in China following last week’s moves there to tighten monetary policy.
The benchmark Straits Times Index finished the day 6.45 points, or 0.2%, lower at 3,190.92 with a total of 1.17 billion shares changing hands compared with 1.25 billion traded Friday.
In the broader market losers dwarfed gainers 283 to 169.
USD/SGD expected to test new lows this week after MAS tightens, says OCBC currency analyst Emmanuel Ng; “they have changed the rules of the game. The Singapore dollar will trade heavier over the next couple of sessions as the market will try to gauge where the new band is.”
Singapore MAS may not tighten more after “unprecedented” move today on faster-than-expected economic rebound, says OCBC Bank economist Selena Ling, according to Dow Jones.
Prospect of more tightening measures from Beijing following stronger-than-expected China economic data prompts investors to lighten positions on Singapore shares after early gains driven by Wall Street’s modest overnight advance, reported Dow Jones Newswires.
The STI off 0.1% at 2,858.58 midday vs high of 2,875.21 (+0.5%); likely to hold above this week’s low of 2,820, with Jan 21 high of 2,890 expected to offer resistance. Market breadth tad negative vs four gainers for each decliner in early trade.
