Singapore shares fall on Monday amid escalating Israel-Iran conflict; STI down 0.1%
[SINGAPORE] Stocks on the local bourse ended slightly lower on Monday (Jun 16), in contrast to gains across most key regional indices, against the backdrop of escalating tensions between Israel and Iran.
The benchmark Straits Times Index (STI) slid 0.1 per cent or 2.96 points to 3,908.46. Across the broader market, gainers beat losers 246 to 226, after 948.9 million securities worth S$1 billion were traded.
The biggest winner on the STI was ST Engineering , which was up 2.1 per cent or S$0.16 at S$7.96.
At the other end of the index was Singapore Airlines (SIA) , which fell 1 per cent or S$0.07 to S$6.87. The drop comes after shares tumbled on Friday following a crash involving an Air India plane on Jun 12, as SIA holds a 25.1 per cent stake in the Indian carrier.
Meanwhile, local bank counters ended in the red. DBS fell 0.7 per cent or S$0.29 to S$44.16 while UOB edged down 0.4 per cent or S$0.13 at S$34.82 and OCBC slid 0.2 per cent or S$0.04 to S$16.02.
Elsewhere in the region, market sentiment remained more positive. South Korea's Kospi and Japan's Nikkei 225 gained 1.8 per cent and 1.3 per cent, respectively. Hong Kong's Hang Seng Index rose 0.7 per cent and the Bursa Malaysia Kuala Lumpur Composite Index was up 0.1 per cent.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Christian Gattiker, head of research at Julius Baer, said that for markets, the Israel-Iran conflict 'remains within the realm of 'Geopolitical 101': a sharp, but ultimately transient shock – unless escalation accelerates meaningfully from here'.
He noted that unless the situation rapidly expands, such as through a disruption in the Strait of Hormuz, direct US or Saudi Arabia involvement, or widespread proxy engagements, the market is unlikely to adjust beyond the initial risk premium.
Until then, he said it remains a tactical event rather than a strategic one, providing traders with an opportunity to take profits and reassess their positions.
'The key for investors is not just whether the conflict continues, but whether it intensifies in scope or duration,' said Gattiker.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
2 hours ago
- Straits Times
Singapore shares dip ahead of Fed decision; STI down 0.3%
The benchmark Straits Times Index (STI) lost 0.3 per cent or 9.83 points to close at 3,920.81. PHOTO: ST FILE SINGAPORE - Stocks on the local bourse fell on Wednesday (Jun 18), tracking the mixed performance in other Asian markets, as investors awaited the US Federal Reserve's policy decision and release of its updated dot plot. The benchmark Straits Times Index (STI) lost 0.3 per cent or 9.83 points to close at 3,920.81. Across the broader market, decliners outnumbered advancers 243 to 212, with 822.1 million securities worth $905.7 million changing hands. The biggest gainer on the STI was telco giant Singtel, which rose 1 per cent or $0.04 to $3.97. The uptick followed news that its subsidiary Optus Mobile had reached a settlement with the Australian Competition and Consumer Commission, over court proceedings related to alleged sales misconduct. At the bottom of the index was agribusiness Wilmar International. The counter slid 2.7 per cent or S$0.08 to $2.93, after Indonesian authorities seized 11.8 trillion rupiah (S$928 million) from its parent company, Wilmar Group, in a palm-oil graft case. Meanwhile, the trio of local banks ended in the red. DBS fell 0.5 per cent or $0.23 to $44.23; UOB was down 0.3 per cent or $0.12 at $34.83; and OCBC lost 0.3 per cent or $0.05 to close at $16.04. Elsewhere in the region, key indices ended mixed as investor sentiment remained cautious ahead of the Fed's policy decision. Japan's Nikkei 225 rose 0.9 per cent and South Korea's Kospi was up 0.7 per cent. The Bursa Malaysia KLCI ended flat, Australia's ASX 200 shed 0.1 per cent, and Hong Kong's Hang Seng slid 1.1 per cent. The Fed is widely expected to keep interest rates unchanged at its meeting on Wednesday, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. She noted that the base case remains for two rate cuts this year, with the first unlikely to happen before September, based on Fed funds futures pricing. Ahead of the decision, the probability of a September cut stood at around 63 per cent. 'While the economic projections and dot plot could shift market expectations, rising geopolitical and trade uncertainties mean the Fed's growth and inflation forecasts may lack precision,' she added. She cautioned that any signals from the dot plot should be taken 'with a grain of salt', as the Fed is likely to emphasise that policy remains appropriately positioned and that future moves will depend on incoming data. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
3 hours ago
- Business Times
Singapore shares dip ahead of Fed decision; STI down 0.3%
[SINGAPORE] Stocks on the local bourse fell on Wednesday (Jun 18), tracking the mixed performance in other Asian markets, as investors awaited the US Federal Reserve's policy decision and release of its updated dot plot. The benchmark Straits Times Index (STI) lost 0.3 per cent or 9.83 points to close at 3,920.81. Across the broader market, decliners outnumbered advancers 243 to 212, with 822.1 million securities worth S$905.7 million changing hands. The biggest gainer on the STI was telco giant Singtel , which rose 1 per cent or S$0.04 to S$3.97. The uptick followed news that its subsidiary Optus Mobile had reached a settlement with the Australian Competition and Consumer Commission, over court proceedings related to alleged sales misconduct. At the bottom of the index was agribusiness Wilmar International . The counter slid 2.7 per cent or S$0.08 to S$2.93, after Indonesian authorities seized 11.8 trillion rupiah (S$928 million) from its parent company, Wilmar Group, in a palm-oil graft case. Meanwhile, the trio of local banks ended in the red. DBS fell 0.5 per cent or S$0.23 to S$44.23; UOB was down 0.3 per cent or S$0.12 at S$34.83; and OCBC lost 0.3 per cent or S$0.05 to close at S$16.04. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Elsewhere in the region, key indices ended mixed as investor sentiment remained cautious ahead of the Fed's policy decision. Japan's Nikkei 225 rose 0.9 per cent and South Korea's Kospi was up 0.7 per cent. The Bursa Malaysia KLCI ended flat, Australia's ASX 200 shed 0.1 per cent, and Hong Kong's Hang Seng slid 1.1 per cent. The Fed is widely expected to keep interest rates unchanged at its meeting on Wednesday, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. She noted that the base case remains for two rate cuts this year, with the first unlikely to happen before September, based on Fed funds futures pricing. Ahead of the decision, the probability of a September cut stood at around 63 per cent. 'While the economic projections and dot plot could shift market expectations, rising geopolitical and trade uncertainties mean the Fed's growth and inflation forecasts may lack precision,' she added. She cautioned that any signals from the dot plot should be taken 'with a grain of salt', as the Fed is likely to emphasise that policy remains appropriately positioned and that future moves will depend on incoming data.
Straits Times
4 hours ago
- Straits Times
Oil prices rise as Israel launches air strikes on Iran, putting in doubt Mid-East supplies
The worsening Middle East conflict raises the risk of disruptions to oil supplies from key oil- producing nations in the region. PHOTO: REUTERS SINGAPORE – Oil prices spiked to their highest level in three years early on June 13 as news broke that Israel had launched dozens of air strikes against Iran, targeting its nuclear programme and military facilities, and killing its senior commanders. Futures on global benchmark Brent crude oil soared by as much as 13 per cent – the biggest intraday move since March 2022 – to US$78.50 a barrel. Prices pulled back to US$73.07 at 3.50pm Singapore time, still up 5.3 per cent from their previous close. Shock waves from the oil market also hit stock markets across Asia, from Hong Kong and Shanghai to Malaysia and Japan. The Straits Times Index, the Singapore stock benchmark, closed 0.3 per cent lower to 3,911.42 points. The fall was led by stocks likely to be impacted by higher oil prices. Seatrium, which builds offshore oil and gas platforms, slipped 2.8 per cent. Worries that jet fuel prices may also gain contributed to Singapore Airlines going down 1.3 per cent. The large-scale Israeli attack could push the Middle East – home to some of the world's top oil-exporting nations – to the brink of a new war and upend global oil supply and demand dynamics, analysts said. Oil prices were on a downtrend, hitting a low of about US$60 in May after the Organisation of Petroleum Exporting Countries (Opec) on May 3 decided to increase production for a second month in a row. Increased output, if sustained, was expected to restore nearly 2.2 million barrels per day of output by October and keep prices around US$60 or lower. Iranian state television said the Natanz site in central Iran, one of the country's two main nuclear plants, was struck. It also said several senior figures were killed, including Major-General Hossein Salami, head of the elite Revolutionary Guards; Professor Mohammad Mehdi Tehranchi, a prominent physicist; and Mr Fereydoon Abbasi, a former head of Iran's atomic organisation. The worsening Middle East conflict raises the risk of disruptions to oil supplies from key oil- producing nations in the region, said Ms Priyanka Sachdeva, senior market analyst at Phillip Nova, an affiliate of Singapore's investment manager PhillipCapital Group. 'The risk appetite of oil investors will likely be tested today with immense volatility and uncertainty,' she said. Fear of retaliation by Iran may prompt oil traders to secure more supplies before the weekend, pushing prices through June 13 higher, analysts said. Most of the Middle East oil flows from the Persian Gulf through the Strait of Hormuz. The strait is one of the world's most important oil transit choke points. Any material shipping disruptions resulting from a blockage of the Hormuz could have profound consequences for the global economy. But Asia's largest economies would be the most vulnerable. Around 80 per cent of oil flows from the Gulf is destined for Asian markets, with India, China, Japan and South Korea accounting for around two-thirds of those flows. Ms Selena Ling, OCBC Bank's chief economist and head of treasury research and strategy, said: 'The question is if this situation escalates into a broader regional conflict. If yes, then there is definitely upside risk to oil prices.' She added that if the conflict escalates and there are further sanctions on Iran, or the Strait of Hormuz is blocked, it could also pose risks to the pullback in inflation that most central banks have been counting on to ease monetary policy. 'The issue is whether tensions escalate and if they are prolonged.' There are, however, some mitigating factors to consider. Saudi Arabia and the United Arab Emirates – the world's top oil exporters – have the capacity to divert a meaningful portion of their current Gulf exports through pipelines, which would partially alleviate the adverse effects of any closure or major shipping disruptions. The alternative ports are, however, in the Red Sea and thus vulnerable if Yemen decides to join the fray. The US halted its bombing campaign against Yemen's Houthis in May after the Iran-aligned group agreed to stop targeting shipping in the Red Sea. The closure of Hormuz is always flagged as a risk whenever tension arises in the Middle East. But so far, despite Iran's repeated threats to do so, it has yet to follow through, due to the adverse consequences for its own oil outlet, let alone the potential response from the international community. Join ST's Telegram channel and get the latest breaking news delivered to you.
