SINGAPORE - Singapore stocks got a strong tailwind boost from higher oil prices and a rally on Wall Street after the United States central bank raised benchmark interest rates as expected by a quarter point - the second hike in three months - but was less hawkish than expected on the pace of future rate hikes.
The Straits Times Index rallied at the opening bell, lifted by the three banks and property blue chips including City Developments, UOL and CapitaLand. As at 9.10 am, the STI was up 0.55 per cent or 17.39 points at 3,154.82.
DBS was up 0.4 per cent or 8 cents to S$19.21, OCBC rose 0.3 per cent or three cents to S$9.68 and UOB was up 0.6 per cent or 12 cents at S$21.63.
The Dow Jones Industrial Average was up 0.54 per cent after the Federal Reserve, in its quarterly economic projections, suggested another two rate hikes by year end, unchanged from the previous forecast, to keep a lid on inflation as it rises above its 2 per cent target level.
Some analysts had thought the Fed might boost the number to three more this year. The less hawkish tone also sent the US dollar sliding against the Singdollar. As at 9.40 am, one US dollar fetched 1.4038 Singdollars, a change of 0.0086 since Wednesday.
"It was a case of sell the USD on the news. A weak dollar could also mean that hot money could flow to Asia today, and some of it may find its way to Singapore, where many stocks are undervalued," remisier Alvin Yong said.
"Property counters are up despite the prospect of rising interest rates because of the view that prices are bottoming," he added.
CDL rallied nearly 2 per cent or 20 cents to S$10.43; UOL gained 1.3 per cent or nine cents to S$6.2, while CapitaLand edged up 1.1 per cent or four cents to S$3.69.