Singapore shares drop after US Federal Reserve delivers another rate hike


SINGAPORE: Singapore shares opened lower on Thursday (Sep 22), tracking steep losses overnight on Wall Street after the US Federal Reserve raised interest rates and signalled further hikes ahead.

The Straits Times Index (STI) kicked off the trading session 0.37 per cent lower, down 12.2 points to 3,249.59.

Losers outnumber gainers 85 to 30, as some 34.7 million securities worth S$58.3 million changed hands.

Banking stocks were among the heavily traded stocks in early morning trade.

DBS was down 0.57 per cent or S$0.19 to S$33.34. OCBC shed 0.49 per cent or S$0.06 to S$12.29 and UOB fell 0.9 per cent or $0.25 to S$27.43.

Elsewhere in Asia, Japan’s benchmark Nikkei 225 index declined 0.9 per cent in early trade, while South Korea’s Kospi index dropped 1 per cent.

The US central bank announced its third consecutive interest rate increase of 0.75 percentage point on Wednesday, continuing the forceful action to tamp down inflation that has surged to the highest in 40 years.

US stocks seesawed following the announcement and later finished the session in the red.

Markets had been expecting another big interest rate increase, but were caught off guard by the Fed’s outlook as far as the need for additional hikes.

The latest Fed statement included interest rate projections for the end of 2023 and 2024 that are higher than the previous forecasts, signalling that the US central bank now sees the need for a more prolonged monetary tightening cycle in light of inflation trends.

The Dow Jones Industrial Average closed down 1.7 per cent at 30,183.78 on Wednesday. The S&P 500 slid 1.71 per cent to 3,789.93 and the Nasdaq Composite dove 1.79 per cent to 11,220.19.



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