The Singapore stock market is anticipated to trade rangebound on Tuesday, with global headwinds and domestic economic data releases setting a cautious tone, despite a modest rebound observed in the previous session. The Straits Times Index (STI), which closed just above the 5,200-point plateau on Monday, may hand back those gains as Asian markets are forecast for a mixed to lower opening.
Monday’s trading saw the STI recover, one session after breaking a six-day winning streak that had propelled the index by more than 250 points, or 5.1 percent. The index concluded the day slightly higher, adding 11.31 points, or 0.22 percent, to finish at its daily high of 5,204.01. This recovery came after the index had dipped as low as 5,174.30 during the session. The gains were primarily driven by retail and financial shares, while property stocks and industrial companies exhibited mixed performances.
Sectoral Performance and Key Movers on Monday
An analysis of individual stock performances on Monday reveals a varied landscape across the Singapore market. Significant gains were recorded by DFI Retail Group, which surged 3.80 percent, and Oversea-Chinese Banking Corporation, jumping 1.50 percent. Hongkong Land also rallied, climbing 1.13 percent. Other financial and retail sector constituents like DBS Group gained 0.50 percent, while SATS rose 0.46 percent, and Singapore Exchange was up 0.42 percent. Industrial and aviation stocks also saw positive movement, with SembCorp Industries strengthening 0.63 percent and Singapore Airlines climbing 0.69 percent. SingTel perked 0.23 percent, and United Overseas Bank collected 0.54 percent, with Mapletree Industrial Trust adding 0.52 percent.
Conversely, several stocks experienced declines. City Developments tumbled 2.42 percent, and Mapletree Logistics Trust tanked 2.44 percent, highlighting weakness in parts of the property and REIT sectors. Thai Beverage cratered 2.25 percent. CapitaLand Investment retreated 1.56 percent, UOL Group stumbled 1.92 percent, and Wilmar International slumped 1.07 percent. Keppel Ltd declined 1.15 percent, and CapitaLand Integrated Commercial Trust skidded 0.85 percent. Mapletree Pan Asia Commercial Trust dropped 0.79 percent, Keppel DC REIT lost 0.44 percent, and Seatrium Limited shed 0.49 percent. Singapore Technologies Engineering fell 0.18 percent, and Yangzijiang Shipbuilding sank 0.54 percent. Meanwhile, CapitaLand Ascendas REIT, Genting Singapore, and Frasers Centrepoint Trust remained unchanged.
Global Headwinds and Wall Street’s Influence
The cautious outlook for Singapore’s market on Tuesday is largely influenced by a weak lead from Wall Street. Major U.S. averages, after opening slightly higher, quickly reversed course to finish mixed. The Dow Jones Industrial Average managed to climb 148.01 points, or 0.29 percent, closing at 51,712.71. However, the NASDAQ Composite tumbled significantly, shedding 351.33 points, or 1.32 percent, to close at 26,166.60, while the S&P 500 sank 27.79 points, or 0.37 percent, ending at 7,472.79.
The slump in the NASDAQ was attributed to widespread weakness among technology stocks, notably with shares of SpaceX (SPCX) plummeting by 16.4 percent. This downturn in tech was exacerbated by an increase in treasury yields, with the yield on the two-year note reaching its highest levels in over a year. Concerns regarding the future trajectory of interest rates drove yields higher, ahead of the release of crucial inflation data later in the week. Market participants appear apprehensive that an acceleration in the pace of inflation, potentially stemming from President Donald Trump’s war with Iran, could prompt the Federal Reserve to raise interest rates later this year.
Furthermore, crude oil prices experienced a notable plunge on Monday. West Texas Intermediate crude for July delivery was down $1.63, or 2.13 percent, settling at $74.97 per barrel. This decline occurred despite reports from the Iranian military indicating a closure of the Strait of Hormuz, although other reports suggested commercial vessels were operating freely in the strait.
Domestic Economic Indicators on the Horizon
Closer to home, Singapore is poised to release its May consumer price index (CPI) figures later this morning. This data will provide further insight into the domestic inflation landscape. In April, overall inflation in Singapore was down 0.3 percent on a month-on-month basis but registered an annual increase of 1.8 percent. Core CPI, a key measure excluding volatile items, was up an annual 1.4 percent in April. These figures will be closely watched by investors for indications of economic stability and potential monetary policy implications.
The confluence of a mixed global market sentiment, particularly weakness in technology sectors and ongoing concerns about interest rate hikes, alongside the anticipation of fresh domestic inflation data, suggests a challenging environment for the Singapore stock market. The STI’s ability to hold its recent gains will likely depend on how these external and internal factors unfold throughout the trading day.
