US inflation data, Wall St rally lift Singapore shares; STI adds 0.8%

SINGAPORE – Better inflation data in the US and the Wall Street surge that followed set the tone for a positive day across regional markets on Jan 16.

The optimistic sentiment here lifted the Straits Times Index (STI) 0.8 per cent or 28.55 points to 3,801.13.

In the broader market, gainers easily outpaced losers 326 to 168 on trade of 926.3 million securities worth $1 billion.

The gains were led by offshore and marine company Seatrium, which added 3.2 per cent to $2.26, but integrated resort operator Genting Singapore went the other way, declining 1.3 per cent to 74 cents.

The three local banks mirrored their American peers and clocked up solid advances. DBS rose 0.6 per cent to $43.78, OCBC added 0.9 per cent to $17.02 and UOB was up 1.3 per cent to $37.06.

US markets set the theme for the day after new inflation numbers revived expectations of interest rate cuts.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all had their best trading days since the November 6 post-election rally. The Dow rose 1.65 per cent, the S&P 500 advanced 1.83 per cent and the Nasdaq ended 2.45 per cent higher.

Most key regional indexes followed suit.

Hong Kong’s Hang Seng and South Korea’s Kospi both closed up 1.2 per cent, while the Nikkei 225 in Tokyo ended 0.3 per cent higher. Australian shares had their best day in three weeks, surging 1.4 per cent on the back of financials and property.

Malaysian stocks were the outliers, falling 0.4 per cent.

IG market strategist Yeap Jun Rong said market expectations “are increasingly focused” on a 25-basis-point rate hike by the Bank of Japan at its meeting on Jan 23 to 24.

“A surprise decision to hold rates steady at the upcoming meeting could trigger an initial sell-off in the Japanese yen, but that could be counterbalanced by a slightly hawkish tone from policymakers to mitigate the yen’s decline,” he added.