At first glance, Wednesday looked ugly.
The STI fell 1.63%, or 93 points, making Singapore one of the weaker markets in the region.
But look under the hood and the picture was quite different.
19 of the 30 STI stocks on SGX actually rose. Only seven fell.
The big drag came from the banks.
$OCBC Bank(O39.SI) dropped 5.9% after Citi downgraded the stock to Sell, while $UOB(U11.SI) and $DBS(D05.SI) fell 2.9% and 1.4% respectively. Given how much weight the three banks carry in the STI, when all three fall together, the index will naturally look a lot worse.
And perhaps some perspective is useful here.
Singapore stocks, especially the banks, have had a very strong run. The STI gained close to 10% in Q3 alone. After such a move, valuations are higher and sometimes all it takes is one less-positive catalyst for investors to take some money off the table.
The broader regional mood wasn't exactly helping either.
Oil is back above US$100 as markets watch developments in the Middle East, while the US 10-year Treasury yield remains around 5.3%. Even though Wall Street hit fresh highs overnight, Asian markets chose not to follow.
Quite an interesting divergence.
So when an index drops 93 points, the headline can look scary. But sometimes it pays to ask one more question:
What is actually causing the fall?
In this case, the answer was more concentrated than the headline suggested.
Thanks to Senior Business News Correspondent Lewis Ong, ็้ณๅ, from ๆฉๆฅ่ดข็ปๆฐ้ป for the discussion and for sharing my thoughts with readers.
https://www.zaobao.com.sg/finance/singapore/story20261007-9799598
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