Singapore, Asia markets fall on Tuesday amid calls for AI slowdown; STI down 1.4%

Singapore and Asian markets closed lower on Tuesday (Sep 15) following remarks from top executives of US artificial intelligence firms and leading chipmakers. These industry leaders raised concerns about the rapid pace of AI development, citing safety issues that had caused investor unease. The Straits Times Index (STI) shed 1.4 percent, or 79.38 points, to close at 5,638.64.

Within the broader market, more stocks fell than rose, with 346 losses against 176 gains. A total of 1.1 billion securities, worth S$1.8 billion, changed hands.

Mapletree Pan-Asia Commercial Trust was the top performer on the blue-chip index, climbing 0.8 percent or S$0.01 to S$1.21. Among the STI constituents, OCBC suffered the steepest decline, slipping 2.7 percent or S$0.85 to S$31. Other local banks, DBS and UOB, also ended the day on the downside, with losses of 1.2 percent and 2.4 percent respectively.

In the iEdge Singapore Next 50 Index, First Resources was the biggest winner, surging 4.3 percent or S$0.20 to S$4.83. Conversely, UltraGreen.ai suffered the steepest decline, dropping 5.1 percent or US$0.03 to US$0.555. Louis Chua, an equity-research analyst at Julius Baer, noted that AI safety concerns are not new. However, he believes the market's reaction demonstrates heightened investor caution about the long-term viability of strong AI-related earnings, exacerbated by major macroeconomic events such as upcoming Federal Open Market Committee and Bank of Japan meetings.

Despite the market volatility, Chua remains optimistic about the role of leading Japanese companies in advancing global AI infrastructure, which he views as "healthy and supported by genuine demand." He maintains confidence in the Nikkei 225's target of 75,000, citing strong earnings growth, record shareholder returns, improving return on equity, and ongoing structural reforms as factors supporting this outlook.