The STI falls 3.5%, its second big drop in two days. DBS, OCBC and UOB lead a rout driven by inflation and rate fears
The STI closed at 5,412.96 on 8 October, down 3.49 per cent, after a 1.6 per cent fall the day before. The Business Times reported that the three local banks led the fall and attributed the rout to inflation and interest-rate concerns. At the open the index fell 1.22 per cent to 5,539.75 and DBS dropped 2.32 per cent to S$75.69 (BusinessToday). The Fed's minutes, released early on Thursday Singapore time, showed most officials expected another rate rise by year-end. Oil rose on Middle East supply concerns and a report that President Trump may order strikes on Iran before the midterms (BT). Japanese and South Korean shares also fell (BT), and CNA said Asian bonds were under pressure from a wave of AI-related debt.
The banks are the core of Singapore's stock market and of many retirement portfolios. A two-day loss of about 5 per cent in the index is rare and shows how sensitive Asian markets are to US rates and oil.
If you hold bank shares or STI funds, a sharp fall is not a reason to sell in itself. If you are investing regularly, lower prices mean your next purchase buys more.
The sell-off is about global rates and oil, not about Singapore's banks, whose capital and earnings remain strong. It may reverse when the panic fades.
Higher-for-longer rates and oil above US$100 could slow Asian growth and raise bad loans. The market may be repricing for a harder 2027.
Three things will tell us whether this is a shake-out or a turn: whether foreign funds keep selling, what the next US inflation data show, and how MAS judges the outlook in its policy statement. Until then, expect large swings.
DailyDrop Singapore edition No. 4 · Morning · THU., OCT. 8, 2026