Easing inflation bolsters stocks; STI up 0.4%

SINGAPORE – Local shares defied falls on Wall Street and returned to the black on Aug 23 after data showed that inflation had moderated in July.

The Straits Times Index (STI) gained 0.4 per cent or 14.41 points to 3,387.99 with gainers beating losers 283 to 238 on relatively modest trade of 844.2 million securities worth $918.7 million.

The optimism stemmed from news that

July’s headline inflation held steady at 2.4 per cent

while the key core consumer price index (CPI) posted the second consecutive month of deceleration at 2.5 per cent.

“This represents the lowest core CPI reading since February 2022 and should be welcome news to policymakers,” said Ms Selena Ling, chief economist and head of global markets research and strategy at OCBC Bank.

US policymakers seem ready to pull the trigger on the first rate cut, with attention on Federal Reserve boss Jerome Powell’s speech late on Aug 23 (Singapore time), at the annual Jackson Hole Economic Symposium, where he is tipped to give more hints on when interest rate cuts might begin and how big they will be.

Wall Street was focused on whether the Fed will make a deep cut in September while tech stock weakness hit the Nasdaq. The Dow Jones Industrial Average fell 0.45 per cent, the S&P 500 retreated 0.63 per cent and the Nasdaq slid 1.13 per cent overnight.

Across the region, Japan’s Nikkei 225 climbed 0.4 per cent while South Korea’s Kospi and Hong Kong’s Hang Seng both shed 0.2 per cent and Australian shares dipped a smidgeon to end their 10-day winning streak.

Sats was again the STI’s top gainer, rising 2 per cent to $3.57. Thai Beverage also led the gains, up 1 per cent to 50.5 cents.

Seatrium was at the bottom of the table, down 2 per cent at $1.48, with City Developments next, off 0.8 per cent to $5.20.

THE BUSINESS TIMES