SINGAPORE – Shares in Singapore on Feb 13 began the holiday-shortened week on a flat note, with all eyes on the latest US inflation data that will shape market expectations for rate cuts by the world’s largest central bank.
The Straits Times Index rose 3.57 points or 0.11 per cent to 3,141.87, following Wall Street’s mixed showing overnight with the Dow Jones Industrial Average pushing to a fresh record, ahead of the release of the US’ January headline consumer price index.
Expectations are for the disinflationary trend in the US to remain intact.
While higher-than-expected inflation figures could scale back market expectations for rate cuts and fuel the US dollar’s upside, a softer print will gladden markets.
Even so, investors may be too optimistic over the Fed’s potential rate cut trajectory, argue some economists.
DBS Group Research’s economics team said in a note: “We think some rate cuts are possible in second half of 2024 if inflation remains well-behaved, but market pricing for at least 200 bps (basis points) in cuts in 2024-25 might be too optimistic.
“Growth would have to slow materially, perhaps driven by instability in the financial sector, for that to happen. No sign of such a scenario for now.”
Elsewhere in the region, key gauges in Japan, South Korea and Malaysia finished higher while Australia bucked the trend. Markets in China, Hong Kong and Taiwan remained closed for the Chinese New Year holiday.
Turnover in the local bourse stood at 1.16 billion units worth $1.18 billion. Advancing stocks outnumbered falling ones with 211 counters up and 154 counters down.
Singapore’s banking trio were mixed with DBS Bank retreating 0.2 per cent to $32.49, OCBC Bank closing unchanged at $12.95 and UOB finishing higher by 0.3 per cent to $28.22.
Seatrium, Thai Beverage and Singtel were the day’s most actively traded counters.
ComfortDelGro’s announcement that its wholly owned unit has acquired a UK-based ground transport management and accommodation network specialist for £80.2 million (S$136 million) to widen its footprint failed to stir excitement. Shares of the land transport giant fell $0.01 or 0.7 per cent to $1.39.
Straco jumped $0.045 or nearly 10 per cent to $0.51 after the company guided on Feb 9 before the lunar trading holidays that it expects to report a substantial net profit for FY2023, swinging into the black from a net loss reported in FY2022.
The tourism facilities operator said the stronger showing was due to higher revenue from the company’s China attractions in FY2023.
THE BUSINESS TIMES