STI steadies after volatile week amid Middle East tensions; SIA, SATS decline

Defence and offshore and marine counters were gainers through the week. Read more at straitstimes.com.

SINGAPORE - The Straits Times Index recovered slightly to close at 4,848.25 on March 6, after falling as low as 4,777 earlier in the week amid volatility triggered by the escalating conflict in the Middle East.

The blue-chip index had previously breached the 5,000-point mark before the conflict began on Feb 28, when the United States and Israel launched a military campaign in Iran.

Analysts said uncertainty is likely to persist as the conflict pushes up oil prices, with Brent crude trading at a one-year high around US$87 a barrel on March 7.

UOB analysts wrote in a March 6 report that widening Middle East tensions and Iran’s threat to block access to the Strait of Hormuz are emerging as key threats across Asia, primarily through higher oil prices.

The Strait of Hormuz is the world’s most critical energy chokepoint, with around 20 per cent of global crude oil and liquefied natural gas supplies shipped through this waterway. Nearly 80 per cent of these flows are to meet Asian demand.

“Higher energy prices would weigh on consumer sentiment, real incomes, and spending as well as industrial margins for some sectors,” the analysts said.