Can the STI Hold Its Ground at 4,500?

The Singapore stock market is showing signs of fatigue after three consecutive down sessions, with losses accumulating to nearly 50 points or 1.2 percent. The Straits Times Index is now hovering precariously around the 4,500 support level, raising questions about whether this technical floor will hold. Tuesday’s session is likely to open on a weaker note as traders digest ongoing market uncertainties.

Market Backdrop and External Pressures

Global equity markets are presenting a cautious picture ahead of the Federal Reserve’s policy announcement later this week. The FOMC decision is keeping investors on edge, with most of Wall Street operating in negative territory. European bourses showed mixed results with minimal movement, while U.S. markets drifted lower, suggesting Asian equities may follow a similar path of consolidation and modest declines.

STI Performance: A Closer Look

On Monday, the Singapore benchmark settled at 4,507.08, down 24.28 points or 0.54 percent after trading in a range between 4,502.88 and 4,534.44. This represents the index’s continued struggle to maintain momentum, with weakness spread across multiple sectors.

The financial sector bore the brunt of selling pressure, alongside property stocks and industrial names. Among key contributors to the decline, DFI Retail Group led losses with a 2.20 percent plunge, followed by CapitaLand Integrated Commercial Trust’s 1.72 percent drop. Keppel Ltd declined 1.27 percent, while Yangzijiang Shipbuilding fell 1.17 percent.

Other notable decliners included Hongkong Land and SembCorp Industries, both down 1.50 percent, Comfort DelGro retreating 1.39 percent, and City Developments slipping 0.96 percent. CapitaLand Ascendas REIT, Mapletree Pan Asia Commercial Trust, and UOL Group each lost 0.70 percent. DBS Group, SingTel, and Keppel DC REIT showed smaller declines of 0.35, 0.44, and 0.44 percent respectively.

On the upside, Venture Corporation managed a 1.14 percent gain, while Singapore Technologies Engineering added 0.24 percent. A handful of stocks, including Wilmar International, Genting Singapore, and Mapletree Logistics Trust, remained flat on the session.

Wall Street’s Weak Close Weighs on Sentiment

U.S. markets struggled throughout Monday’s session, with major indices closing solidly lower. The S&P 500 fell 23.89 points or 0.35 percent to 6,846.51, the NASDAQ declined 32.22 points or 0.14 percent to 23,545.90, and the Dow dropped 215.67 points or 0.45 percent to 47,739.32.

The pullback came after recent strength that had pushed the NASDAQ and S&P 500 to their best closing levels in a month last Friday. Profit-taking naturally followed, though trading volumes remained subdued as participants awaited clarity from the Federal Reserve.

Commodity Pressure and Rate Cut Expectations

Energy markets reflected broader risk-off sentiment, with crude oil prices sliding. West Texas Intermediate crude for January delivery dropped $1.28 or 2.13 percent to settle at $58.80 per barrel, pressured by a stronger U.S. dollar in anticipation of the Fed’s decision.

The market consensus widely expects the Federal Reserve to cut rates by another 25 basis points this week. However, traders are carefully parsing the policy statement for forward guidance on the likelihood and pace of additional cuts in the coming year, which will likely determine the broader market direction going forward.

The 4,500 Question

With the STI’s struggle to maintain its footing above the 4,500 mark, investors are watching closely to see if this level provides meaningful support or if further downside testing becomes inevitable. The convergence of uncertainty around Fed policy, profit-taking momentum, and sector-specific weakness suggests the near-term path of least resistance remains lower, making the integrity of key technical levels a critical focal point in the sessions ahead.