Singapore equities underwent a broad market correction in October, with technology stocks bearing the brunt of the sell-off and institutional investors withdrawing a net S$1.55 billion from the market, according to a report published by the Singapore Exchange (SGX) on Monday.

The Straits Times Index (STI) recorded a 5.2% decline in total returns, while the iEdge Singapore Next 50 Index fell 6.8%. The FTSE ST All-Share Technology Index plunged 17.3%, making technology the worst-performing sector during the month.

The iEdge S-REIT Index proved more resilient, declining 1.4%. Telecommunications stocks also generally experienced smaller losses than many technology counters.

The correction came after a strong run in Singapore equities earlier in 2026 and coincided with declines across several major Asian markets, including South Korea, China and Japan.

Institutional Investors Turn Net Sellers

Institutional investors recorded net outflows of S$1.55 billion from Singapore-listed equities in October, while retail investors moved in the opposite direction, purchasing a net S$1.65 billion worth of shares.

Banking stocks accounted for a significant portion of institutional selling. DBS Group Holdings and Oversea-Chinese Banking Corporation (OCBC) together recorded S$758.4 million in institutional net outflows.

Other stocks experiencing notable institutional selling included Yangzijiang Shipbuilding, Keppel, CapitaLand Investment and Singapore Exchange.

However, investment flows varied across sectors and individual companies. Utilities attracted S$47 million in institutional net inflows, while non-REIT real estate stocks received S$11.6 million. Telecommunications companies also recorded net inflows of S$6.3 million.

Sembcorp Industries, Hongkong Land, Singtel and StarHub were among the stocks attracting institutional buying. UOB also recorded institutional net inflows of S$25.8 million, contrasting with the outflows seen at DBS and OCBC.

Despite the October sell-off, retail investors maintained their buying activity. Their cumulative net inflows reached S$5.9 billion over the first 10 months of 2026.

Technology Stocks Retreat After Strong Gains

Technology shares experienced a sharp correction in October following substantial gains earlier in the year, although performance varied considerably among individual stocks.

AEM, UMS Integration and Frencken fell 24%, 26% and 23%, respectively, during the month. Despite the declines, their total returns for the first 10 months of 2026 remained at 335%, 80% and 47%, respectively.

PC Partner also dropped 22% in October, although it retained a year-to-date total return of 211%.

All four companies recorded institutional net outflows during October, but remained net recipients of institutional buying over the January-to-October period.

Not all technology stocks moved lower. AvePoint gained 26% in October, bringing its total return for the first 10 months of the year to 22%.

The International Monetary Fund said on Oct. 20 that continued investment in artificial intelligence infrastructure was supporting semiconductor demand and exports across Asia. However, it also identified a reassessment of AI-related profitability and productivity as a potential downside risk.

REITs Prove More Resilient

Singapore-listed real estate investment trusts (REITs) were relatively defensive during October, with CapitaLand Integrated Commercial Trust (CICT) attracting the largest institutional net inflows among Singapore-listed stocks.

CICT received S$79.2 million in institutional net buying and delivered a positive total return of 2% during the month, according to SGX.

CapitaLand Ascendas REIT recorded its second-highest monthly traded value on record, reflecting strong trading activity.

Acrophyte Hospitality Trust, Frasers Centrepoint Trust and Suntec REIT were the three best-performing S-REITs in October.

Operating updates released before the market closed on Oct. 30 indicated positive rental reversions across the sector, although distribution outcomes varied among individual trusts.

Institutional investment trends within the REIT sector were mixed. While CICT attracted fresh institutional capital, CapitaLand Ascendas REIT, Keppel DC REIT and Frasers Centrepoint Trust recorded net outflows of S$51.3 million, S$28.7 million and S$25.7 million, respectively.

Singapore Economy Maintains Growth Momentum

The correction in Singapore equities came despite continued expansion in the domestic economy.

Advance estimates showed that Singapore's gross domestic product grew 5.4% year over year in the third quarter of 2026, following 6.2% growth in the previous quarter. On a seasonally adjusted quarter-over-quarter basis, GDP expanded 1.1%.

Manufacturing activity also remained relatively strong. Output increased 3.4% year over year in September, or 9% excluding biomedical manufacturing.

For the first nine months of 2026, manufacturing production rose 9.8% from a year earlier. Electronics output expanded 24.6% over the same period, while precision engineering production increased 18%.

Singapore's banking sector also recorded growth in lending and deposits. Loans and advances reached S$1.543 trillion in September 2026, compared with S$1.343 trillion a year earlier. Non-bank customer deposits rose to S$2.16 trillion from S$2.011 trillion over the same period.

Looking ahead, third-quarter earnings announcements and corporate updates in November are expected to provide investors with further insight into business conditions, company performance and management outlooks.