STI down 0.5% at 3,142.02 midday, tracking steep falls in Shanghai after China State Council steps up its battle against inflation, sparking rate hike worries.
“This is another timely reminder that the Chinese central bank’s stance is pretty straight forward, that we have got too much money around, it’s looking for broad-based sustainable growth and the days of cheap credit are behind us,” says CIMB economist Song Seng Wun.
If China tightens more, expect knock-on reaction in Singapore “mainly just because we take the lead from the bigger markets, Hong Kong in particular.” Adds, there will always be direct link to anything related to weaker China consumption, “but we would urge investors to generally take a longer term view.”
Trade value today ($1.43 billion) easily outstrips Monday’s full day, suggesting most action in blue chips, with large-cap property stocks lower; Keppel Corp (BN4.SG) off 2.4% at $10.66.