SINGAPORE, Sept 18, 2007 (AFP) - Singapore share prices closed flat on Tuesday in cautious trade ahead of a key United States Federal Reserve policy meeting, dealers said.
They said the Fed was widely expected to cut interest rates to cushion the world's largest economy from a housing slump, ease stress in credit markets and head off a potential recession.
The Straits Times Index closed 1.44 points higher at 3,477.75 on volume of 1.88 billion shares worth 1.94 billion dollars (1.28 billion US).
Rising issues edged losers 353 to 345 with 914 unchanged.
Most analysts said they expected the Fed, which has held its federal funds rate at 5.25 percent since June 2006, to cut the benchmark rate by 25 or 50 basis points, which could lead to lower borrowing costs for many consumers and businesses.
The Fed was to announce a decision at 1815 GMT Tuesday.
While a Fed rate cut is expected to help the US economy avoid a recession, lingering concerns about a credit crisis in the US "subprime" mortgage sector were making investors cautious, dealers said.
"It's not safe to get back in," Phillip Securities research head Chan Wai Chee said. "The subprime risk is still there."
Banking shares were lower, with DBS Group down 10 cents at 19.30 dollars, Oversea-Chinese Banking Corp down 10 cents at 8.60 and United Overseas Bank off 30 cents at 20.50.
Among property stocks, City Developments rose 10 cents to 15.20, Keppel Land was flat at 8.05 and CapitaLand was also unchanged at 7.95.
Shipping company Neptune Orient Lines rose 10 cents to 4.92 dollars, while Singapore Airlines was unchanged at 18.70 and Singapore Telecommunications gained eight cents to 3.82.
