Most regional indices boosted by ECB rate cut expectations, but STI ends flat

SINGAPORE equities ended Thursday (Jun 6) largely unchanged, as signs point to the European Central Bank (ECB) cutting interest rates for the first time since 2019.

The benchmark Straits Times Index (STI) climbed marginally by 0.02 per cent or 0.8 point to 3,330.81.

Across the broader market, 1.2 billion securities worth S$1.2 billion changed hands, and gainers outnumbered losers 294 to 270.

While the STI was nearly flat, its regional peers finished higher, driven by the expectations of an European rate cut on Thursday.

Hong Kong’s Hang Seng Index climbed 0.3 per cent, while Japan’s Nikkei 225 rose 0.6 per cent. The Bursa Malaysia Kuala Lumpur Composite Index closed up 0.4 per cent and Australia’s S&P/ASX200 gained 0.7 per cent. South Korea’s market was closed for a public holiday.

Saxo’s Asia-Pacific research team said the rate cut prediction comes despite inflation not reaching the 2 per cent target, which “raises the question if the start of easing may be premature”.

“In recent weeks, the ECB narrative has turned more neutral from dovish to signal data-dependency post the likely June cut. This suggests that ECB president Christine Lagarde’s press conference will be more important to watch than the decision itself,” said the team in a note.

Back home, the STI was led by ST Engineering : S63 0%, which rose 0.7 per cent or S$0.03 to S$4.09.

The index was dragged by property developer City Developments : C09 0%, which fell 1.8 per cent or S$0.10 to S$5.50.

The trio of local banks were up at Thursday’s close. DBS : D05 0% expanded 0.4 per cent or S$0.14 to S$35.50, while UOB : U11 0% added 0.3 per cent or S$0.08 to S$30.77. OCBC : O39 0% finished up 0.1 per cent or S$0.02 to S$14.30.