Singapore shares hit a one-month low on Wednesday, dragged down by financials, while other Southeast Asian stock markets were subdued in line with Asia as tensions in the Korean peninsula simmered down a little.
The Singapore index lost as much as 1.1%, with financial stocks accounting for more than half of the losses.
Top lenders DBS Group Holdings fell as much as 1.4% and Oversea-Chinese Banking Corp (OCBC) slipped 1.8%.
“The interest rates have not really been rising as much as people are expecting, so that will definitely impact the interest margin going forward,” said Joel Ng, an analyst with KGI Securities in Singapore.
“Another reason has also been that many of the oil and gas companies are now having huge write downs on their assets. I think that is also affecting the banks somewhat.”
Singapore’s offshore and marine industry has been hit by low oil prices, weak charter rates and delays to projects, forcing many firms to restructure debt and cut costs.
Energy stocks also fell, with offshore rig builder Keppel Corp shares were down as much as 1.7% on Wednesday, while Sembcorp Industries was down 1.3%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%, while the dollar rallied to its highest level against a basket of major currencies in nearly three weeks.
Thai shares fell 0.1%, hurt by financials and energy stocks. Telecommunications company Samart Corp fell as much as 4.4%, on track for a fifth session of losses.
Thailand’s central bank on Wednesday is expected to keep its benchmark interest rate unchanged where it has been more than two years, a Reuters poll showed.
Philippine shares were marginally higher, while Indonesia rose as much as 0.3%.