STI Outlook

SINGAPORE (XFN-ASIA) - Share prices closed sharply lower as players tracked the declines in foreign markets sparked by concerns that rapid inflation and further US rate hikes ahead could hurt the global economy, dealers said. The Straits Times Index closed 32.10 points or 1.32 pct lower at 2,404. 45, its lowest since Jan 27 when the market closed at 2,412.08. The index moved between a low of 2,376.53 and a high of 2,435.75. Losers outnumbered gainers 563 to 98, with 1,393 stocks unchanged. Volume was 1.25 bln shares valued at 1.36 bln sgd. A dealer with local brokerage firm said the next level of support is seen at 2,350 after the index briefly fell below 2,380 in afternoon trade. The dealer said the market may remain bearish tomorrow as players await US data due out tonight announcing first-quarter GDP revisions while the US core PCE deflator, a gauge of inflation, is due for release tomorrow. "Some economic data are coming out. I guess there's going to be a chain reaction (among the markets) if they fall outside market expectations," the dealer said. DBS Group Research in a report said global markets are waiting to see if the US will report a second 0.3 pct rise for the core PCE deflator, after reporting a similar increase in March. "Another 0.3 pct rise in the core PCE deflator in April looks likely," DBS said. Index heavyweight Singapore Telecommunications (SingTel) was down 0.04 sgd or 1.6 pct at 2.51 on volume of 49.033 mln shares. Among other blue chips, Singapore Airlines was down 0.30 sgd or 2.4 pct at 12.40 and Singapore Press was off 0.06 sgd at 4.08. Most banks were weaker, with DBS down 0.10 sgd at 17.40 and OCBC 0.05 sgd lower at 6.50. UOB closed flat at 15.10. Chartered Semiconductor, the world's third largest maker of customized chips, was down 0.04 sgd or 2.5 pct at 1.55, while UTAC was down 0.035 sgd at 0.805. Datacraft dropped 0.04 to 1.04 and Venture fell 0.20 to 11.60. Among property stocks, Southeast Asia's largest property developer CapitaLand was down 0.18 sgd or 4 pct at 4.32, while Keppel Land was 0.10 sgd weaker at 4.30.