Singapore shares close lower ahead of expected Wall Street weakness

WEAKNESS in the Dow futures on Tuesday outweighed slight gains in Hong Kong and China, bringing pressure to bear on the Straits Times Index (STI). The selling accelerated in the late afternoon after Europe opened in the red, with the result that the STI finished 30.54 points or one per cent lower at 3,052.53 in low volume of 1.3 billion units worth S$953.5 million.

Of this, S$683 million or 68 per cent came from trading in the 30 index stocks and stripping out the latter, the average value per unit traded was S$0.29. Excluding warrants there were 132 rises versus 285 falls.

The STI had risen for four consecutive days before Tuesday, gaining about 64 points, largely driven by promises of more stimulus from central banks in Europe, China and Japan.

However, with the US Federal Open Markets Committee (FOMC) meeting this week, and even though no rate hike is expected at the meeting, brokers said that markets have switched into cautious mode since the FOMC may offer clues as to when the rate hikes might begin.