MSCI Singapore Index collapses 4.17% on Middle East shock

It closed at 439.56 points after heavy institutional selling in financials.

Singapore’s stock market fell 4.17% in March, with the MSCI Singapore Free SGD Index closing at 439.56 points, as investors weighed rising oil prices and escalating tensions in the Middle East, a report by CGS International said.

Non-oil domestic exports (NODX) grew 4% year-on-year, down from 9.2% in January, dragged lower by non-electronics shipments including petrochemicals, food products, and non-monetary gold. Electronics exports remained strong, led by integrated circuits, disk media products, and PCs, reflecting sustained demand for semiconductors and AI-related products.

UOB Kay Hian identified RH Petrogas as a key beneficiary of rising oil prices, citing its cost control and planned drilling of two exploration wells in 2026 that could provide valuation upside. The brokerage said every $1.28 (US$1) per barrel increase in realised oil prices could lift the company’s earnings by 5.6%. 

Meanwhile, a separate report by RHB said that Singapore’s industrial production is at risk of stagnating at 0%, especially if Brent oil, the global benchmark for pricing oil, remains at $128.52 (US$100) or higher.

Singapore imports up to 55% of its crude from the Middle East, making the economy particularly sensitive to supply disruptions.

Inflation remained moderate, but upward pressures were evident. Headline CPI rose 1.2% year-on-year in February, whilst core inflation climbed to 1.4%, driven by higher costs in services, food, and retail. Every US$10 rise in Brent oil could lift core inflation by 30–40 basis points, according to RHB.

Sector performance mirrored these risks. Consumer staples, utilities, and financials outperformed, whilst developers, transport, and communication services lagged. Institutional investors were net sellers, particularly in financials and REITs, while retail investors generally took the opposite positions, CGS International said.

Economists and policymakers warned that a full-scale escalation of Middle East tensions could create further downside risks for Singapore’s 3% GDP growth target, as energy prices feed into production costs, household utilities, and inflation.

The government has signalled readiness to deploy targeted fiscal support if global developments continue to pressure energy and transport costs, potentially expanding U-Save rebates, GST vouchers, and business assistance programmes.

Technical indicators suggest limited near-term upside for the MSCI Singapore Index, with strong support around 436 points and resistance at 451–460 points.

CGS International maintain a long-term target of 482 points for the six-month horizon, assuming no major escalation in global energy or geopolitical risks.