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STI stabilises, HSI encounters temporary support ahead of Dec FOMC

Goola Warden
Goola Warden12/10/2021 7:54 PM GMT+08  • 2 min read
STI stabilises, HSI encounters temporary support ahead of Dec FOMC
Both STI and HSI have stabilised temporarily as the FOMC indicates a possible interest rate hike
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An uneasy calm has decended over the market. Market participants in the IPO of Digital Core REIT heaved a sigh of relief at its successful debut on Dec 8. S-REITs with US assets have had a challenging two years, trading at higher yields than other S-REITs. Moreover, the failure of Eagle Hospitality Trust has led investors to look upon US sponsors with caution.

The Federal Open Market Committee Meeting or FOMC on Dec 13-14 is widely expected to indicate some quatitative tightening. The FOMC could also indicate that the Federal Funds Rate could see its first hike in mid-2022.

The local market has stabilised after Nov 30, when Sea’s weightage in MSCI Singapore rose to 50%. This re-weighting caused the Straits Times Index to fall sharply to 3,041. The STI remained relatively steady during the week of Dec 6-10, ending the week at 3,135. At this level, the STI remains below the confluence of the 100- and 200-day moving averages at 3,142. The index needs to regain the 3,142 level to have any chance of upside breakouts.

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